World Delayed Projects - Egypt Changes Capital From Cairo To The New Administrative Capital

Opinion Analysis by Annabelle Ghanem, Contributor

April 21st, 2021

Amidst the thirteenth century, the famous city of Cairo was formally established as the capital of the Arabic powerhouse, Egypt. Since then, the significance of the capital’s presence in Arab history has been tremendous, with stories of wars, wonders, and triumphs circulating its streets and ruins to this very day. Cairo remains the largest metropolitan city in the Middle East, as well as the 15th largest in the entire world. However, history is about to take a rather different course in the coming years, as President Abdel Fattah Al-Sisi embarks on a journey towards potential development.

At Egypt’s 2015 Economic Conference, Prime Minister Ibrahim Melheb announced a historical project that aims to change the ancient Egyptian capital from Cairo, to The New Administrative Capital (name is subjected to change). The project falls directly in line with the goals of the 2030 Egypt vision, which calls for the advancement of sustainable developments in the social, economic, and environmental spheres of the nation. However, the phases for constructing the utopian image painted by the Egyptian government have faced tremendous delays due to the economic and health crises inflicting the globe. Thus, several questions remain; why would President Abdel Fattah Al-Sisi want to build an entirely new capital to begin with? How will the New Administrative Capital supposedly help Egypt advance past the overarching problems facing the Egyptian people on a day-to-day basis?

A look inside the future capital

The New Administrative Capital is set to be the largest planned city in the world, measuring almost up to the size of the entire nation of Singapore. According to the current project plans, the new city will include residential areas able to accommodate 6.5 million residents, with over 500 hospitals, 1250 churches and mosques, and almost 2000 educational institutions. Furthermore, a vast number of administrative and government buildings, including 34 ministries, are set to be relocated from Cairo to the NAC, moving elected officials and their families along with them. However, building an entirely new capital is only the cherry on top of the extravagant vision President Sisi has for Egypt, with plans set to break several regional and world records within the New Administrative Capital, making it the ultimate tourist attraction of the Arab and African Regions. 

The NAC will be the home to the tallest tower in all of Africa, the biggest cathedral in the Middle East, a central park double the size of that of New York, and a theme park bigger than Disneyland California, leaving the world impatiently waiting for its grand completion. However, given Egypt’s crippling economy, growing inflation rates, and low job employment stats, why would the government commence a project estimated to cost between 45 to 58 billion US Dollars? And more importantly, how does the government intend to go about this?

Why the new capital project?

With a country hosting over 110 million people, Egypt’s current capital, Cairo, is known for being one of the most congested cities in the world, accommodating more than one-fifth of the Egyptian population, with experts predicting a substantial increase by the year 2050. Thus, the new capital is an essential strategy aiming to accommodate Egypt's booming population rates, while attempting to reduce congestion levels in Cairo. The New Administrative Capital is also what President Sisi believes to be the key to reviving the Egyptian economy by providing thousands of job opportunities and facilities in order to instigate growth in employment rates around the country. However, in order to reach the stage of prosperity, the capital will need to be built. Let’s take a look at how the project is being put in action...

How is the new capital project being funded?

With such an exquisite project comes a lot of foreign interest, especially from emerging nations and companies around the world, that aim to grasp any present opportunity that would lead to further influence and power. Several companies deriving from nations such as the United Arab Emirates, Saudi Arabia, and China, have invested billions of dollars into the New Administrative Capital, tapping into various profiting profitable opportunities such as real estate and architecture. A recent example can be seen in February 2021, when Sky Abu Dhabi Development, a company based in the United Arab Emirates, announced it will be investing almost 1 billion dollars to in the New Administrative Capital, seeing as it is a grand opportunity to further grow the company on a regional level. The renowned China State Construction Engineering Corp., one of the largest construction companies in the world, also struck an agreement in the early stages of the project, investing billions of US dollars in the form of loans and grants into the NAC. 

In addition to the predicted growth of several global companies after the emergence of the new capital, several nations saw the Egyptian project as the perfect opportunity to gain a particular form of power: soft power. With Egypt being one of the geopolitically countries in the Middle East, investing nations poured millions of dollars into its capital project, presumably to gain political influence and exert political pressure on the Egyptian government to further comply with the interests of those nations. This form of soft power could potentially back Egypt into a corner, where it risks losing funds for its billion-dollar project should its government choose not to comply or surrender to instances of foreign political pressure. 

Current status of the New Administrative Capital

The New Administrative Capital’s original date of completion was set for the year 2020. However, funding and constructing the project became increasingly difficult as the coronavirus took the world by storm. Companies had begun delaying and freezing loans to the new capital project due to Egypt’s inability to comply with the original funding agreements. In January 2020, China had pause on its delivery of a promised loan to the Egyptian project, saying that there was not enough proof that the government will be able to repay the funding provided. Construction stopped in April of 2020, as Covid-19 surged in the country, further derailing the project. However, work on the NAC resumed around September 2020, and has since then completed several of the delayed inner projects in the process, such as the Iconic Tower (tallest tower in Africa), several residential districts, hotels, government buildings, and more. 

Although it is uncertain when the New Administrative Capital project will be complete, the Egyptian Government announced that “it will begin trial operations in the first half of 2021,”  bringing us one step closer to a new capital, new developments within the Middle East, and a new historical course. Unfortunately, it remains difficult to predict whether the NAC will truly be as prosperous as the Egyptian government had hoped. There is great geopolitical value for not only policy makers, but citizens, in understanding this arising Egyptian project –  for its future existence or dismantlement will certainly influence a much larger political spectrum of the MENA region.