Egypt plans expansion of new administrative capital

STORY: Egypt is preparing to spend billions doubling the size of its lavish new capital.

The new desert city, 28 miles east of Cairo, is currently known as the New Administrative Capital (NAC).

It's the biggest in a series of high tech mega-projects the Egyptian president Abdel Fattah al-Sisi says are needed for economic development and to accommodate a growing population of 105 million.

The new city project launched eight years ago and government employees began to transfer over in July 2023 to offices built in the first phase.

Here's the project's chairman Khaled Abbas.

"We have now almost 48,000 employees coming every day to all the ministries and some of the public authorities and organizations working from here. We started moving from last March but the beginning of last July, all the ministries started working from here, starting from the prime minister and all the ministries and the entities."

"We have lots of demand now. That's why we have to start immediately on phase two. If there is the demand, then after a year or something like that we can work on phase three."

The city is designed to serve as a high-tech model for Egypt's future, away from the clutter and chaos of Cairo.

Phase one includes a 70-story tower - the tallest in Africa - an opera house with five halls, a mega mosque and the Middle East's biggest cathedral.

Up to 100,000 housing units have been finished and 1,200 families have moved in.

Major banks and other businesses will move their headquarters by the first quarter of 2024.

But critics are not convinced and say the projects divert resources like water and increase the country's debt burden.

ACUD, which is developing the site, is owned 51% by the military and 49% by the housing ministry.

500 billion Egyptian pounds have been spent on the first phase already.

That works out to about $16 billion at the current exchange rate, or $32 billion before Egypt began a series of devaluations in March 2022.

According to Abbas, second phase infrastructure will cost another 250-300 billion pounds.

Egypt's finances have come under strain from an over-valued currency, a decline in remittances and surging debt repayment costs after heavy overseas borrowing.