x Abu Dhabi, UAESunday 23 July 2017

A towering reminder of Egypt's corrupt decades

The saga of the tower and its owner, Khaled Aly Fouda, exemplify the failure of three Egyptian presidents.

One of the tallest towers in Cairo sits empty, held up by bureaucracy and corruption, according to its owner.
One of the tallest towers in Cairo sits empty, held up by bureaucracy and corruption, according to its owner.

CAIRO // Jutting above the skyline on the island of Zamalek in central Cairo is a timeworn glass-and-steel testament to one man's 45-year struggle against the stifling bureaucracy and endemic corruption of the Egyptian state.

The 166-metre Gezira Tower and Hotel is one of the tallest buildings in Egypt and occupies some of its prime land. The cylindrical building was to become a 450-room Mövenpick hotel, but has stood empty for 16 years. A single display room furnished with bedding, lamps and an old television shows what might have been. The rest are bare concrete. A solitary security guard idles at the building's entrance.

The saga of the tower and its owner, Khaled Aly Fouda, exemplify the failure of three Egyptian presidents, as well as both socialist central planning and capitalist free-market reforms, to deliver prosperity to all but a few of Egypt's 83 million people.

It also represents what Egyptians hope might begin to change when they go to the polls this week to choose a president, capping a 16-month whirlwind that has included the toppling of Hosni Mubarak and the election of an Islamist-dominated parliament.

Whether the Tahrir Square "revolution" was a success - or even whether it was a revolution at all - now hinges in part on whether a new, democratically elected president and parliament can begin reforming a sclerotic, graft-ridden economic system that has left Egyptians such as the 81-year-old Mr Fouda shaking their heads in disappointment, disgust and cynicism.

"It's a very long story," said Mr Fouda in his Zamalek apartment as he began describing how a building that was conceived as a crown jewel of a president's vision for a new, modern Egypt is today an eyesore. "It will probably get longer."

Mr Fouda bought the land on which the Gezira Tower sits in 1968 during the presidency of Gamal Abdel Nasser. But it was under Anwar Sadat, who introduced reforms to overturn his predecessor's socialist ideas and open the economy to the world, that the idea for the tower took off.

Mr Fouda started out as an army statistician but moved into government in the late 1960s. He was among a set of bright, young advisers who gathered with Sadat in his village of Menoufiya on Fridays to discuss ideas for Egypt.

At one of those meetings, Mr Fouda pitched Sadat the idea for a tower that would bring Cairo into the skyscraper age.

"Sadat said to me, 'I want to build this country. I would love to see a new Manhattan in Egypt'," Mr Fouda recalled. "I said: 'Would you like Zamalek to be the new Manhattan of Egypt?' I presented my tower. He was very excited."

The seed for a tall tower was planted, but he did not begin investing in the idea until he left the government several years later.

The problems started during the regime of Hosni Mubarak, who took power in 1981 eight days after Sadat's assassination by Islamist militants. At first, the bureaucratic demands did not seem out of keeping with a project to build a tower in one of the world's most populous cities.

In the early 1980s, in one of just dozens of instances in which construction was halted by government ministries and agencies refusing to issue permits and licences, he was ordered to stop digging a 17-metre foundation after an inspector said the fire department did not have the equipment to reach the bottom floor. Then the ministry of interior's traffic department objected to Mr Fouda's parking plan and refused to allow the road to be blocked to bury the utility pipes under the pavement.

Construction ground to a halt for years, while he struggled with the authorities and filed lawsuits. On his daily walks with friends on the grounds of the Gezira Club in Zamalek, he would avoid looking at the incomplete tower because it was a constant reminder to him of failure.

"The problem with this building has always been its beautiful location," Mr Fouda said. "It caught the attention of all the businessmen in Egypt. Some of them were much wealthier than me."

One day, he received a call from Hussein Salem, one of the most prominent businessmen in Mubarak's Egypt. After last year's uprising, Mr Salem was convicted in his absence of defrauding the government and is now awaiting extradition from Spain. But in Mubarak's heyday, he was not easily ignored.

A meeting was set, at which Mr Salem said he could help with Mr Fouda's authorisation "troubles" if he were allowed to take over the building, Mr Fouda recounted.

"I was willing to allow an investment of up to 50 per cent, but he wanted to buy the whole building from me for US$500 million (Dh1.8bn)," said Mr Fouda. "He told me to take the money and go to Switzerland to live a good life. I told him that never in my travels have I found sandwiches as good as the ones with Egyptian foul and felafel. I am not a showy person. I don't need luxuries."

It was a sign that Sadat's free-market policies were being perverted, as a new generation of businessmen used their ties to government officials to amass huge fortunes and portfolios of projects.

Magda Kandil, the executive director of the Egyptian Centre for Economic Studies in Cairo, said graft and influence-peddling flourished after Egypt was forced into economic reforms after defaulting on its sovereign debts in the late 1980s and early 1990s and turning to international donors for loans.

"There was no attempt for the new economic model to be inclusive," she said. "Yes, there was corruption and over-centralisation of the government, but what went wrong is that it was not a level playing field. The ones who benefited were the big investors who knew how to play the game."

The free-market reforms, including changes in tax laws and regulations that made it easier for foreign investment in Egypt, led to some improvements. But the growing population benefited little.

Mr Fouda managed to thrive and continue financing his tower project, even if his struggle was appearing increasingly quixotic. After leaving the government, he set up companies to help foreign businessmen build factories and invest in Egyptian projects.

"At that time, I started making real money," he said.

Nevertheless, the difficulties of developing property remained. Land, he found, was where a confluence of corruption and bureaucracy created huge obstacles to ordinary businessmen. Many of the convictions last year of businessmen and government officials were tied to land deals, where government land was sold cheaply to businessmen who built lucrative projects and compensated the officials through side payments.

In the 1990s, Mr Fouda had bought a piece of land in the Sinai, an area then of little interest to Cairo, and began building a beach resort. By 1996, not long after he signed a contract with Mövenpick to start running the beachfront hotel that year, the government seized the land and the resort, on grounds of Egypt's "strategic interest".

That dispute ended only weeks before the January 2011 uprising. The ministry of defence took control of the land and project, paying 150 million pounds. After paying the interest that accrued on loans to build the resort, Mr Fouda took away just 80 million Egyptian pounds ($13.3m). The project would have brought a windfall, he said, but it was another victim of the imbalanced system.

"I didn't want to sell, but I was up against all the powers. I had no choice. I paid the consequences of an honest career in business."

These days, a skeleton crew has been working on preventing the Gezira Tower from deteriorating further. Dangling from the steel frame of what was designed as a rotating restaurant, workers have been applying rust-proof paint to protect it from the elements.

With the government focused on restoring security and getting the economy back on track, Mr Fouda said he has not yet been able to secure the permits he needs to build parking near by. He is not bitter, but after waiting this long he has no plans to give up.

The next president, he hopes, won't stand in the way of his tower or obstruct any businessman from developing the country. Even if another tycoon comes knocking, Mr Fouda will send him away.

"I will never sell," he said, with a stubborn grin. "I'd rather leave it incomplete in the sky."

 

bhope@thenational.ae