CAIRO - Egypt is to set up a committee to settle problems surrounding investment contracts, the cabinet said on Sunday.
Prime Minister Essam Sharaf ordered the move after a string of legal challenges to sales of state land to real estate developers that have shaken confidence in Egypt's once booming property sector. "This comes within the government's framework to support investment and clear all obstacles faced by investors," the cabinet statement said, without referring directly to the real estate sector. The lawsuits began last year when a court ruled that a sale of state land to Talaat Moustafa Group, the country's biggest developer, was illegal. The case, which sparked a series of similar legal challenges, revolves around whether the government should have respected a 1998 law stipulating all state land sales must take place after competitive bidding. The legal wrangles have gathered pace since mass protests toppled President Hosni Mubarak on Feb.11, sending shares of high-end real estate developers tumbling on worries over the viability of some of their biggest projects. Egypt's general prosecutor has referred two former housing ministers to trial for their role in several controversial deals with real estate firms. Land has been withdrawn from at least three firms. Signals that the army-backed interim government was studying new rules to settle the disputes lifted shares in Talaat Moustafa and rival Palm Hills last week. Shares in the two companies are down 51 per cent and 69 per cent, respectively, this year, compared to a 27 per cent drop in Egypt's benchmark share index .EGX30.
