Despite the positive signal that has been concluded from the latest presidential decree that agreed on King Salman’s development project in Sinai after a period of tension between both countries, however, some recent changes go to the opposite direction and renew tension once again.
Governmental sources said that Saudi Arabia has waved to return back its $2 billion deposit, received by the Egyptian central bank last September.
This development comes in the light of the government’s failure to pass the maritime demarcation agreement between both countries that stipulates that Egypt gives away Tiran and Sanafir islands to Saudi Arabia.
On January 16, 2017, Egypt’s High Administrative Court rejected an appeal by the government against a lower court’s decision to stop it handing over Tiran and Sanafir.
The controversial agreement that gave away the two strategic islands of Tiran and Sanafir to Saudi Arabia has led to massive criticism and outrage among the Egyptians. Critics, journalists, and activists accused Abdel Fattah al-Sisi of “selling Egypt” to Saudi Arabia in return for financial aid.
According to the sources, Saudi Arabia believe that the government won’t be able to push the parliament to pass the agreement or at least put it in to a referendum that guarantees its results.
“Saudi Arabia has provided economic support to Egypt in different fields that is mainly related to a broader context that includes transforming the islands’ sovereignty to Saudi Arabia in return, but this wasn’t achieved,”said sources.
The sources added,”As a result, it started to withdraw gradually what it offered. The first decision was to halt the financial support, then it halted the supply of oil refinery products to Egypt, it also stopped talking about King Salman’s bridge project and now there is a direct talk about returning back the $2 billion deposit.”
It is worth to mention that Egypt has received a $2 billion deposit from Saudi Arabia in 2016 to secure a $12 billion loan from the International Monetary Fund.
In the same context,three Egyptian real estate executives said on Thursday that their companies have suspended housing deals with the Saudi Arabian government amid political tensions between the two countries.
However, a Saudi housing ministry official denied that any project had been suspended, said Reuters.
During King Salman’s April visit to Cairo last year, four Egyptian real estate companies had signed memorandums of understanding with the Saudi Housing Ministry.Al Ahly for Real Estate Development, Talaat Mostafa Group, Misr Italia, and Orbit Group were to build housing units in Saudi Arabia.
Despite the details of the deals were not clear, but local media had said each firm would build between 10,000 to 15,000 units.
Al Ahly for Real Estate Development Chairman Hussein Sabour said,”We suspended the agreement with the Saudi Housing Ministry despite all project studies being concluded because of worries over tensions between Egypt and Saudi Arabia.”
Moreover, Misr Italia Deputy Chairman Mohamed al-Assal said his company was no longer in contact with Saudi Arabia over the deal.
He said,”The agreement was canceled due to a lack of cooperation from the Saudi side and a breakdown in communications between both sides since last June.”
Orbit Group also said that its agreement with Saudi Arabia was suspended but declined to provide details. Talaat Mostafa Group has not said that it has suspended work, and did not respond to requests for comment, as reported by Reuters.
On the other hand, a Saudi official denied that projects had been suspended.
Naif Abdulmouhsin Al-Rasheed, an advisor to the housing minister and general manager of Investments and Real Estate Development in the ministry,said “There has been no suspension of any deal between Egyptian real estate developers and their Saudi clients.”
“Any alleged tension between Saudi Arabia and Egypt is causing a strain on bilateral economic partnerships is categorically false,” he noted.
He added,”In fact, there are advance dealings that are still taking place with specific projects. In addition, the Ministry of Housing welcomes any interest from both local and international developers, including our valued Egyptian partners.”
The relations between Egypt and Saudi Arabia have strained after Egypt voted on the Russian-backed draft resolution in the United Nations security council. Egypt’s vote on October 8 to support a Russian Security Council resolution on Aleppo has exposed an unprecedented rift between Egypt and its strongest Arab ally, Saudi Arabia.
The vote triggered the first public condemnation by the Saudis of the Egyptian regime, which they helped bring to power three years ago.
The Saudi criticism also coincided with cutting monthly discounted oil shipments to Egypt, a much-needed support for the country’s deteriorating economy.
In addition, the final ruling of the Egyptian court last month,which rejected the government’s plan to transfer the two Red Sea islands to Saudi Arabia, has also deepened tensions between Cairo and Riyadh.