Business monthly September 07
 
EDITOR'S NOTE COVER STORY EXECUTIVE LIFE
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Exporters Outsource Credit Risk Industries To Kick Energy Subsidy Habit
Metro Planners Run Into Opposition Retail Gold Market Loses Luster
Telecom Firms Eye Fixed Line Prize

BY AMENA BAKR

There’s a fine line between the rights of the individual and the common good. Currently, it is being tested in Abbasiya, where construction on Cairo’s third metro line has pitched residents and shopkeepers against civic planners. A conflict has been brewing since the government announced its plan to demolish 21 buildings near Abbasiya Square to create a metro station, and has only intensified with the arrival of construction crews last May.

The new station is one of 29 terminals planned for the third metro line, which will run from Imbaba in the west to Cairo International Airport in the northeast, passing through Zamalek, Attaba, Abbasiya and Heliopolis. The 34-kilometer line is expected to serve millions of commuters a day and help alleviate Cairo’s burgeoning traffic problem. Given that, the government’s decision to remove a few homes and shops to create a metro station seems reasonable on the grounds that the public interest should take priority over private property.

Even those whose homes and shops have been earmarked for demolition generally agree. Where they disagree, however, is in the level of compensation offered by the government. “The National Authority for Tunnels said that they would pay us LE 2,000 per square meter, which is ridiculous, because our shops are worth millions,” says Salah El Sayed, owner of a fiteer shop in Abbasiya Square. “This is one of the most established commercial districts in Egypt, which is why it is so valuable.”

Atta El Sherbiny, chairman of the National Authority for Tunnels (NAT), has made no objection to the claim, but says the compensation package is not for him to decide. “We are prepared to pay these people whatever they want, but the decision has to come from the Cairo Governorate office,” he told Business Monthly. While the compensation will come directly from NAT’s pocket, it is according to a value set by real estate experts and officials from the governorate’s office, he explained.

In theory, the team of experts assembled by Cairo Governorate conducted a comprehensive survey of real estate prices city-wide and in the areas affected by construction, and used the data to formulate the actual value of the shops and homes, offering the owners of these units fair market value. However, Cairo Governorate officials declined all requests by Business Monthly for interviews to explain how the process was actually carried through.

Abbasiya Square residents and store owners in the path of the metro line received notice last year that their buildings would be demolished. However, a Cairo court, responding to a complaint filed by a group of shop owners, ruled on July 4 that demolition orders could not be issued before a special committee convenes and the court determines whether the allocated area is necessary for the project. “The committee came here and they examined the location and said that the final word would be given by the first week of September,” says Magdy Mokhtar, one of the lawyers handling the case.

Despite the court ruling, preparation for the demolition is already under way. Buildings have been cordoned off, utilities cut and digging crews are looking busy. “We can’t really stop a project like this, and we can’t afford to be late as the opening of the first phase is scheduled for October 2011,” explains El Sherbiny. He said the E250 million construction contract for the first phase of the third line, stretching 4.3 kilometers from Imbaba to Abbasiya, was awarded to a consortium led by French contractor Vinci Construction Grands Projets, which previously worked on sections of lines one and two. “We already paid them LE 350 million as an advance, and if we are late in any stage of the project we have to pay them a penalty of LE 50 million.”

The 21 buildings slated for demolition line one side of a street on which an underground metro station will be built. El Sherbiny explains that the construction requires tunneling close to their foundations, which will put them at serious risk of collapse. “These are very old buildings and when we dig the tunnel 20 to 30 meters down, the buildings will certainly fall,” he says.

Tempers flared on July 7 when Waily district authorities began dismantling the area’s utilities. “They came up this street like the Tartars, uprooting all the electricity cables and destroying our water and gas pipes,” complained Hisham El Zeini, a koshary shop owner. “This raid was basically an attempt to scare people and force them to accept their lousy compensation. Their message was loud and clear: ‘resistance is futile.’”

Within days, the occupants of six of the 21 buildings had raised the white flag, accepting the compensation package offered. But the action also strengthened the resolve of the remaining property owners, who have vowed to carry on the fight. “We decided that the best way is to team up and fight for our right till the very end,” says El Sayed.

Lawyer Mokhtar insists the government’s tactics are unlawful, as the state cannot take any disruptive action before the court issues its verdict. “I can’t believe they dared to cut the electricity and surround these shops with metal barriers like a prison,” he says. “When we win this case, God willing, we are going to demand compensation.”

Retailers say the construction work has transformed their once-vibrant street into a “dungeon” where shoppers feel unwelcome. “We lost most of our customers over the past couple of months,” complains one store owner whose building has been earmarked for demolition. “At this point I have no faith in the government because they are harming more than 300 workers and their families.”

Businesses in buildings that have not been marked for demolition are faring no better, insists Mohamed Ahmed, who owns a bakery across the street from the main construction site. A number of store owners told Business Monthly that they intend to seek compensation from NAT for blocking their stores’ entrances with large metal barriers, which has obstructed customers from entering. “The workers told us that it was just to protect our shops from the construction going on, but at the same time it has turned our sidewalk into a trench,” complains Ahmed.

Distrust pervades the air. Some property owners doubt the government’s intention to build a metro station at all, believing a rumor that corrupt officials have plans to build a garden and sell it to foreign investors.

El Sherbiny confirms that a garden will be built, but insists this is an integral part of the metro line’s design. “You have to understand that when we have an underground tunnel we need ventilation machines to pump air inside the tunnel,” he explains. “These machines will be placed inside the garden, which will be [planted with vegetation] because we don’t want it turned into a garbage dump.”

Transportation infrastructure projects often create conflict between the government and property owners in the construction zone, El Sherbiny points out. “People are always unhappy about the compensation they get,” he says. “We faced similar opposition during the construction of the first and the second metro lines. We had people from Shobra and Helwan complaining, and they also went to court, but in the end the project went on and they accepted the compensation offered.”

El Sherbiny says that with pressure mounting to find a solution to Cairo’s ever-worsening traffic problem, NAT and the Ministry of Transport must put the public interest first. “If we don’t build this metro line, the average car speed in Cairo will go from 25 km/h today to 8 km/h by 2012, which means you’ll be better off walking home,” he says. “At the end of the day, let’s face reality... the project must go on.”

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