Chinese withdraw from Egypt's project to build new capital

One of the world's biggest construction firms has withdrawn from an agreement to build a new capital for Egypt, because the government found the quotes involving Egyptian contractors to be too high.

The China State Construction Engineering Corporation (CSCEC) had signed a Memorandum of Understanding to lead construction on a new set of parliamentary buildings, but Egyptian spokespersons said they were unsatisfied with the prices quoted.

"The two parties didn't reach a mutually satisfactory agreement in respect to the price per metre of implementing the project," said New Administrative Capital Company chairperson, Ayman Ismail, adding that the company had received lower prices from Egyptian contractors.

"The Chinese company wanted to depend on local Egyptian construction companies, which would have been more costly for us."

CSCEC had not signed a contract to complete works.

The entire project, which is currently on hold, is expected to cost around $45 billion, but many detractors have pointed out that this money could be better spent elsewhere in a country facing serious economic problems.

The project is being managed by the New Administrative Capital Company, which is jointly owned by the Ministry of Housing and the country's military.

President Sisi reportedly put a halt on the project in October due to a "lack of funding", one month after a Chinese consortium agreed to provide a $20 billion package.

Since the overthrow of President Morsi in 2013, Sisi has attempted to revive the Egyptian economy by launching multi-billion dollar mega-projects, such as the Suez Canal expansion project.

Critics say these projects do not make much economic sense and amount to national vanity projects.