An Overview of the Institution

The New Urban Communities Authority (NUCA) is an economic institution[1] in charge of urban development in Egypt. It is tasked with identifying new city sites, and formulating their development strategies. It ensures the well-functioning and good management of the infrastructure and public facilities in new cities. It also provides residential land lots to individuals, investment companies, and residential complexes, in addition to subsidized residential projects allocated to low income youth, like Mubarak Housing Project, the Future Association Housing Project, the Non-affiliated Housing Projects, and the Family Housing Project. NUCA was established in accordance with Law No. 59 of 1979.

The Institution’s Mandate

• Establishing new urban centers that achieve social stability and economic prosperity.
• Re-distribution of the population away from the narrow strip of the Nile Valley.
• Establishing new areas of attraction outside existing cities and villages.
• Extending axis of urban expansion to the desert and remote areas.
• Reducing urban encroachment on agricultural land.
• Drawing up policy and preparing urban development plans and programs for the establishment of new urban communities, and coordinating these plans and programs with the plans for production and services.
• Conducting studies on the selection of the most suitable sites for new urban communities.
• Organizing, coordinating and exchanging advice with ministries, institutions and entities engaged in urban development activities and related fields, in addition to the study and construction of regional facilities and service facilities for new urban communities.
• Following-up the implementation of plans for developing the new urban communities, and overcoming the physical and technical obstacles that may hinder the construction process, in addition to evaluation of achievements.
• Conducting general planning and detailed planning of the selected sites in accordance with the provisions of the law; the execution of works and projects through conducting tenders or bidding in accordance with prevailing global and local practices, or through direct contracting in accordance with the regulations adopted by NUCA; NUCA supervises the implementation of these projects in each new urban community, either by itself or by the competent development authority.
• Studying the best ways to implement the regional facilities in the new urban communities so as to ensure the economic relevance of the projects involved, the division of land and the establishment of internal facilities. This could be done either by NUCA itself or by the competent development authority, or any other way deemed appropriate by NUCA.
• Obtaining loans or grants in accordance with the rules prescribed by law in addition to the appropriations allocated to the NUCA to ensure sufficient funding for projects.
• Assisting in both obtaining equipment and the performance of tasks required for the implementation of projects.
• To promote the sale, lease or use of the lands of new urban communities for Egyptian and foreign investors for the economic development of the projects, without prejudice to the rules governing the ownership by foreigners.
• Proposing the granting of concessions or privileges [to provide services], and stating the duration of such concessions or privileges in accordance with the second paragraph of Article (11) of Law No. 59 of 1979.
• In order to achieve its objectives, the law gave NUCA absolute power to conduct all actions and works needed to achieve the programs and their specific priorities. The law gave the NUCA the right to assign work and to directly contract individuals, companies, banks, and local and foreign institutions (in addition to determining the price of land and the direct sale of land, as happened in “Madinaty” [My City] project).  However, these arrangements always lead to conflicts and contradictions between the approach of assigning works used by NUCA, and the requirements of the Law of Tenders or Bidding.

The New Urban Communities Authority can divide the new urban communities into cities, villages, regions and neighborhoods, and can define each of their requirements, specifications and type of buildings. NUCA also issues building permits in accordance with these requirements and specifications, and stakeholders must abide by them.

The Institution’s Affiliation, and the Mechanisms for Selecting and Appointing its Board of Directors

NUCA is affiliated with the Ministry of Housing, Utilities and Urban Communities. The Minister of Housing is the Chairman of the Board of Directors of the NUCA [President of NUCA] (despite that the law stipulates that the Chairman shall be assigned by the President of the Republic). The Chairman assigns one of his deputies as the head of its administrative body, which shall manage its affairs and supervise its employees.

The Board of Directors of the NUCA consists of the Chairman, and members who are leaders and representatives of sectors, ministries, and institutions concerned with the activities of NUCA, in addition to a number of experts.  The President of the Republic shall issue a decision to form the Board of Directors based on a recommendation of the body responsible for NUCA [the Ministry of Housing].

The heads of the development bodies of the urban communities are invited to attend the meetings of the Board of Directors of NUCA, and each of them shall have a vote on the subjects that fall within his/her area of competence.

Ministries that do not have a representative on NUCA’s Board of Directors shall be invited to delegate a representative to deliberate on subjects within their area of competence. The representative shall be entitled to vote only on these subjects.

The Administrative Structure

The New Urban Communities Authority consists of four main sectors, in addition to the Office of Chairman of the NUCA which is responsible for managing the internal affairs of NUCA, and chaired by the First Deputy Chairman of the NUCA. As for the four main sectors, they are chaired by the NUCA Chairman Deputies (as illustrated in diagram no. 1 below); these sectors are the following:

• Planning and projects sector
• Development and creation of cities sector
• Financial and administrative affairs sector
• Real Estate and Commercial Affairs Sector

The organizational structure of the New Urban Communities Authority
(source: http://www.newcities.gov.eg/about/haykl/default.aspx)

The Board of Director’s Mandate

• Develop a policy of establishing new urban communities, selecting their sites and adopting their general and detailed plans.
• Approval of draft planning budgets and long, medium and short term plans for projects.
• Develop an appropriate method for the development of each new urban community.
• Make decisions on the establishment of companies, and on the contribution of NUCA to an in-kind or cash share in the capital of companies associated with the NUCA’s activity, in accordance with the provisions of the applicable laws.
• Approval of the draft annual budget and the closing account of NUCA.
• Develop the policy for managing new urban communities until this responsibility is transferred to local government units according to the provisions of the law.
• Establishment of NUCA’s organizational structure and its subsidiary bodies, through which NUCA carries out its activities and projects, in addition to issuing decisions to establish the bodies that manage the new urban communities.
• Examining the periodic reports on the work progress and financial status of NUCA.
• Examine issues provided by the body responsible for NUCA or its Chairman as matters falling within its competence.

The Institution’s Relations with other State Institutions and Departments

• Since NUCA is the institution responsible for urban development in Egypt, all entities concerned with the establishment of projects and industries in any of the new urban communities, of whatever nature or area, whether governmental or non-governmental, must inform NUCA about these projects and industries. NUCA shall express its opinion on the location and work of these projects in order to ensure that it be established in accordance with the prescribed plans. NUCA shall provide its opinion on this matter no later than one month from the date of its notification.
• In the event of disagreement between the competent authorities and NUCA on the locations of these projects and industries, the matter must be presented to the Prime Minister and his decision in this regard is binding on all parties and NUCA.
• Government agencies, local government units, public bodies, public sector companies and all entities supervising state property of all kinds are prohibited from taking any action in the desert lands, arid lands and agricultural lands located outside the existing cities, with the aim of dividing them up for the construction of buildings thereon, without prior approval from NUCA.
• Private entities and individuals are also prohibited from dividing any desert land, arid lands and agricultural lands owned by them outside the existing cities with the aim of constructing buildings thereon, without prior approval from NUCA.

NUCA Funding and Budget

NUCA capital consists of the following:

• Funds allocated by the State to NUCA.
• Lands selected in accordance with the provisions of the law for the establishment of new urban communities.
• Other lands allocated by the State to NUCA to enable it to implement its goals and objectives.
• Any fixed or movable assets transferred to NUCA.

NUCA’s funds are considered state funds.

NUCA’s resources consist of the following:

• State appropriations
• Proceeds from the sale, rent and use of land and property owned by the NUCA
• The proceeds of NUCA’s activities and the fees it receives for the work or services performed to other entities
• Loans
• Funds received from grants, subsidies, donations and wills

NUCA’s Authorities

In order to achieve its objectives, the law gave NUCA absolute powers to conduct all actions and works that would achieve the programs and their specific priorities. The law gave the NUCA the right to assigning works and to directly contract individuals, companies, banks, and local and foreign institutions, in addition to determining the price of land and the direct sale of land.  However, these arrangements always lead to conflicts and contradictions between the approach of assigning works used by NUCA, and the requirements of the Law of Tenders or Biddings.

Management of the NUCA’s Projects

Methods of Selecting Development Areas and Determining their Boundaries and Ownership

NUCA is responsible for selecting sites necessary for the establishment of the new urban communities and for preparation of general and detailed plans for these sites according to the general plan of the State.  The sites and plans are chosen by NUCA or by its affiliated agencies or by contracting with persons, companies, think tanks and local and foreign bodies, in accordance with the provisions of laws and regulations in this regard.

NUCA shall allocate an area surrounding any new urban community with a distance of no more than five kilometers from all sides.  It is prohibited to dispose, exploit, use or divide this area in any way or to establish any facilities, projects or buildings thereon without the approval of the NUCA.  In addition, an area of land is allocated on both sides of the public roads leading to the new urban communities and along these roads with a width of 100 meters.  These specific areas on the sides of the roads are subject to the same restrictions as specified in the preceding paragraph.

A decision shall be issued by the Prime Minister after the approval of the Council of Ministers to allocate the State-owned lands chosen for the establishment of the new urban communities and the roads connected to it, as well as the lands mentioned in the preceding paragraph.  This decision shall be binding on all ministries, bodies, institutions and agencies concerned with state property of all kinds.  These lands are designated for construction and other purposes necessary for the new urban community.

Any natural or legal person is prohibited from holding, occupying or encroaching on any part of the land allocated for the purposes mentioned in the preceding paragraph.  It is also prohibited to carry out any work or to establish any installations or use or occupancy in any way except with the permission of the NUCA.  Any such violation shall be removed through administrative procedures by a decision of the Board of Directors of the NUCA, regardless of the justification of the violation or date of its occurrence.  Removal shall be carried out after the payment of fair compensation if occupancy of the land is based on legal grounds.

Implementation of Projects

The law gives NUCA the right to determine the obligations and grant privileges for public utilities and projects in new urban communities in accordance with the following rules and procedures:

• Choose concessionaires in a framework of competition and transparency.
• The concession period shall not exceed forty years from the date of the contract.
• The concessionaire’s share of the net profit shall not exceed 20% of the capital invested and licensed.
• Net profit, other than the 20% allocated to the concessionaire, is used to create a special reserve for years in which net profit is less than the value sought.  Where profits are increased, they should be used to improve and expand the facility or project and reduce prices as determined by NUCA.
• Determine the technical and financial controls of the concessionaire to ensure the proper and consistent management of the facilities.
• Achieve equality between users of facilities or project concessions or privileges
• In cases not mentioned above, a law is issued to grant concessions or privileges.
• NUCA’s Board of Directors may concede the right to use some of the real estate necessary for the implementation of projects related to the development of the national economy or to support existing projects or to establish projects of public benefit.  The concession shall be in accordance with the terms and conditions issued by a decision of the Council of Ministers.  The concession period, whether continuous or intermittent, shall not exceed forty years.

Managing the New Urban Communities and Transferring them to Local Governance

NUCA and its apparatus and units shall have all the powers conferred by law on local governance units so that the NUCA may perform the functions entrusted to it. NUCA also obtains the financial resources allocated for local governance units, until the new urban community is handed over to the local government.

NUCA will also have the authority to approve the establishment, construction and operation of any activities, projects, works, buildings, facilities and services, and to issue the necessary licenses, in accordance with the applicable regulations and laws.

After completion of the basic facilities of new urban communities, they are handed over to local governance units to exercise their jurisdiction in accordance with the law governing local government. This process is effected by a decision issued by the Council of Ministers on the basis of a recommendation by the body responsible administratively for the NUCA.  This decision shall specify the rights and obligations of both NUCA and the competent local governance unit.

Article (50) of Law No. 59 of 1979 states that after the completion of their facilities, new urban communities will join the governorates in which they are located.  However, the law does not include time-limits for the transfer of community management and development powers to local governance units. The role of local governance units is limited to the provision of public services, so there is no real contribution to local governance units in the development process.