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Mohamed Tharwat

Special to The Gazette


Housing corruption: The housing cooperative sector has been entrusted with building many apartment blocks by pooling the resources of middle-class people.

A recent decision by the Minister of Housing Ahmed el-Maghrabi to dissolve the board of the Housing Cooperative Union for Housing and refer ten of its members to the Prosecution has taken off the lid on suspected corruption, according to experts.

Mohamed Saad Khattab, former Chairman of the Saqr Qoreish Association and a former member of the Union, blames “the dictatorship that has controlled the Union for many years” is for alleged violations."When the Union was suspended in the era of former Minister of Housing Mohamed Ibrahim Soleiman, the temporary board was led by Helmi Zein Eddin who blackmailed the members to elect him or else he would report their violations," he claimed."After being elected, he soon fell into the hands of the Prosecution after accepting a bribe for illegally manipulating a public bid for a certain group of contractors,” Khattab recently told the Arabic magazine October."Then the former Minister assigned Bayoumi el-Barqi and the financial supervisor was fired, being replaced by Mohamed Ali el-Far," he added."Although the General Authority for Building and Housing Cooperatives stripped him of his post, the board of the Union appointed him as its financial supervisor. The Union was simply 'an official gateway' for generating illegal profits and accepting bribes."According to the Egyptian Centre for Housing Rights, the housing cooperatives sector basically undertakes construction for the middle class, by pooling the resources of middle-class people who want to improve their housing situation. The State has greatly assisted this sector, to the extent of loaning the cooperative associations LE1.2 billion in 1991-92, although this fell to LE550 million in 1995-96. There have been a huge number of complaints arising from Egypt's cooperative housing schemes, all of which revolve around the control of an individual or group over the funds of those requesting cooperative housing. The projects have tailed off for many reasons, to such an extent that some cooperative projects have been going on for twenty years or more (as in the case of the Muntasir Housing Project, in the Helwan district, belonging to an engineer's cooperative association, which was started way back in 1976!). Also, there are pending complaints of chaos and injustice in the distribution of units that, out of nepotism, go to relatives and friends of those controlling the funds pool.Khattab describes how the former board of the Union used loopholes in the law through its committees.One of the committees affiliated to Union is named the Partnership Committee. Any housing cooperative association can tell the Committee it has no budget for establishing housing units for low-income brackets. So they agree with a contractor to build houses on a certain area of land, in return for giving the contractor half of that land."This is how the corruption starts: the price of the land offered to the contractor is undervalued, while he's given the best part of the land anyway."One of the hottest corruption cases currently being investigated by the Prosecution involved the above-mentioned ten board members of the former Union who are charged with giving construction contracts worth LE54 million to two contractors in the new communities without public bidding, as stipulated by law.Mohamed el-Demerdash, the Assistant Minister of Housing, says that, in order not to appoint a temporary board for the Union for fear of more corruption, Minister Ahmed el-Maghrabi has instructed that the transitional board comprise three representatives from the censorship and sovereign authorities, in a bid to curtail the continuous violations and prepare for new board elections.El-Demerdash says the Minister set up a committee five months ago, presided over by Chairman of the National Council for Housing Research and Building Amr Salama to amend the Housing Cooperative Law to plug the loopholes in the current law.Maher Wahba, a member of Al-Ofoq (Horizon) Housing Association, admits that some people are doing business at the expense of low-income brackets who pay good money to associations to achieve their dream of having a housing unit."Some associations build luxurious units for their board members. These cooperatives have squandered LE15 billion [$2.7 billion]," he explains.Wahba says such cooperatives are meant to solve the problem of housing in Egypt, but they've only made it worse and caused house prices to skyrocket.Seif Farag, a housing expert, says the Government should reconsider the interest rate on housing loans, reduce the cost of building and activate the Mortgage Law.


http://www.egyptiangazette.net.eg/

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