Officials in charge of delivering a USD 20 bn development in the New Administrative Capital (NAC) said two years of talks with China Fortune Land Development (CFLD) have halted following financial disagreements between the two parties, Bloomberg reports.

Neither party could agree on terms for sharing revenues made from the project, as Egyptian authorities wanted 40% of the revenue, while Chinese builder CFLD was only willing to offer 33%, Khaled Elhusseiny, a spokesperson for the New Administrative Capital for Urban Development (ACUD), told Bloomberg on December 16.

“We found that to be unacceptable especially they were going to have a premium plot,” he said.

Talks were deemed at an end after the Egyptian party responded to CFLD’s final proposal on developing 15,000 acres over 25 years in the new capital east of Cairo, and yet, received no answer.

“We didn’t hear back … The talks have stopped,” ACUD Chairman Ahmed Zaki Abdeen noted to Bloomberg.

Meanwhile, Deputy Minister of Housing for National Projects Khaled Abbas said there could be a substitute for the failed project, however, not in the NAC.

“This could be an alternative to the new capital project,” he said by phone, without elaborating.

The failure of the CFLD project raises further questions on Egypt’s ability to attract new foreign direct investments (FDI) to spur growth.

Egypt has been struggling to attract major foreign investments unrelated to its oil and gas industry. FDI in Egypt dwindled by USD 200 mn to USD 7.7 bn in the fiscal year ending June 2018, even after the government took measures to float its local currency in 2016 and, in turn, received a USD 12 bn facility from the International Monetary Fund (IMF).

Back in June 2016, CFLD began talks with the Egyptian government over the NAC’s development project and signed a memorandum of understanding in October that year, agreeing to plan, develop, manage, and market the said section of the new smart city.