The Saudi-Egyptian Construction Company (SECON) has announced that three new projects will be built in the areas of New Cairo, New Damietta and New Assiut. The three projects will cover a total area of 100 acres, and will see investments of EGP 3bn pumped in.
In an interview with Daily News Egypt, SECON CEO Darwish Hassanain talked more about the company’s projects.
What are the company’s new projects?
The company has three new projects amongst the lands we recently received of 100 acres as part of the Egyptian share in raising the company’s capital.
The company received a cut of the three land from the Egyptian government in order to effectuate an agreement between the Egyptian and Saudi governments to increase the company’s capital by $243m. The Saudi government paid $121.5m in cash, and the Egyptian $121.5m through in-kind share, equivalent to about 100 acres in three new cities, while the kingdom turned the cash share of the capital in the company’s account in mid-January.
We opened preliminary booking for two projects in New Cairo, Damietta during the Cityscape exhibition while booking in the new Assiut project will be opened later. The three projects’ investments amounted to around EGP 3bn.
Meanwhile, the official booking will start by the beginning of next year. We are different from other investors, as we don’t finalise booking or receive deposits until the start of the projects’ implementation.
Tell us more about these projects; when will you start their implementation?
The project in New Cairo will be established in three phases over four years, while the projects in Damietta and Assiut will be implemented in two phases over three years. The Damietta project will include a four-star hotel with a capacity of 100 to 120 rooms. The project is currently in the process of finding the company which will manage this hotel. The project in New Cairo will include 2,000 units of residential buildings composed of ground and four floors, with five different models starting from 120 sqm to 190 sqm per apartment.
We will start the implementation of the New Cairo and Damietta projects before the end of 2015, while we will start the Assiut project implementation by the beginning of 2016. For the first time, the company will work on three projects at the same time, which reflects the company’s financial stability. Over the next two years, SECON will own two hotels, a four-star hotel in Damietta and a five-star hotel in Maadi, Cairo, as part of the SECON towers project, which has a capacity of 256 rooms, and will be managed by the Hilton.
What is the status of the company’s other projects?
For our huge SECON Nile Towers project, it will be fully established by the second half (H2) of 2016. The project is composed from two towers of 23 floors each,;one is a residential tower and the other is a five-star hotel with the capacity of 256 rooms and it will be operated by Hilton International. The company has marketed 30% of the residential tower, which includes 190 units.
The company has implemented 30% of the project, representing the toughest part of SECON Nile Towers, which are the foundations and underground floors. The project’s investments reach EGP 1.8bn and is implemented through an alliance between the two contracting companies, Arabtec and SIAC, while we are planning to complete implementation by mid-2016.
We also have Lake Dream, the residential project in 6th of October City, which will be also fully implemented by mid-2016. The project is being implemented on an area of 35 acres, and includes 376 units varied between villas and apartments. The project’s total investments amounted to approximately EGP 550m and is being finalised over three phases. The first two phases were completed, as the implementation started in March 2011, and 70% of the project has been implemented. The project’s third phase includes 80 housing units worth EGP 130m, while the implementation started in early 2015 and is targeted to be completed by mid-2016.
This is in addition to our project in Alexandria, SECON Residence, which is a residential, administrative and commercial tower, composed of 11 floors, including 84 luxurious units.
Regarding Upper Egypt, you already have a project in Assiut; what is its situation?
We already have a project in Assiut, which includes 10 residential buildings made of a ground floor and five floors, and it is estimated to be fully implemented within two years. We are looking forward to the Upper Egypt economic conference to choose a project that suits our company policy. We have taken a decision that a part of our projects’ energy will be generated by solar power, and the study is now being undertaken in the New Cairo project, the New Damietta project and hopefully in Assiut. We have studied solar energy in depth, and it is a great project; it has higher costs compared to ordinary power sources, but significantly lowers the electricity bill. For example, if 30% of the project is dependent on solar energy, then the electricity bill will be 30% lower than usual. The energy savings can lead to a refund of your solar power plant value in approximately 10 years, while it can live for 25 years. In the other 15 years, the project will have additional revenue from energy saving.
How do you perceive Egypt’s investment market?
I believe that the Economic Summit was a golden gate for passing more great projects to Egypt, which is a huge economic step. We are waiting for the launching of the mega-projects that were announced at the summit, and will be implemented through the Public Private Partnership (PPP) System, which I think is the optimum solution for the implementation of the major projects that Egypt needs. It’s significant that the government signed agreements with local or foreign investors providing each party’s right, as for the success of any investment, every party must benefit from it. Egypt and the government have tremendous assets, and these assets need huge financing and also qualified management, which can be provided through the private sector.
I also hope that Upper Egypt will take part in those huge projects, as I believe Upper Egypt needs more attention from the government. This is why I admired the president’s decision regarding the launching of an economic conference specifically for Upper Egypt later this year. Further, I expect that Upper Egypt will be a new surprise for Egyptian citizens. I encourage all investors to get ready for new investment opportunities over the upcoming period.
What is the volume of expected growth in profits next year?
We are expecting to grow our profits by 60% this year compared to 2014 through intensify the implementation plan of our projects in delivering a large number of units.
SECON achieved a 40% growth in the company’s profits in 2014, compared to 2013.