DUBAI/CAIRO - A $40 billion deal for Dubai firm Arabtec to build one million homes in Egypt may mark the start of politically-inspired Gulf investment in the country's creaking infrastructure, from housing to transport, power generation and agriculture.
Egypt's economy is recovering only slowly from the turmoil that followed its 2011 revolution. Its government lacks the cash to build infrastructure, while political and business risks are still far too high for most companies to invest in projects.
But with the Arabtec deal - one of the largest construction contracts ever announced in the region - Egyptian and Gulf governments appear to have found a formula to channel billions of dollars into the economy in a way that serves their political and economic interests.
The construction company said on Sunday that it had agreed with the Egyptian army to build the homes at 13 locations around the country on land provided free by the armed forces, which own a large amount of financial assets and real estate.