Home | | Contact Us

Armed Forces Lands and Private Sect

Armed Forces Lands and Private Sector Partnership
Presidential Decree No. 446 of 2015[1] made minor amendments to a previous Presidential Decree issued in 1981 regulating the sale and alienation of lands belonging to the armed forces.[2] The new Decree entitled the competent Authority - Armed Forces Land Projects Authority – to alienate lands evacuated by the armed forces through incorporation of companies solely or in partnership with national and foreign capital. The alienation of these lands has to be in accordance with the provisions of the Tenders and Bids Law. In this context, it is beneficial to provide a brief highlight of the original legal framework guiding this issue in order to clarify the importance of the latest amendments.
The Initial Decree
The 1981 Decree was one of former President’s Anwar El-Sadat latest decrees. The Decree consists of five Articles prescribing the rules governing the alienation of evacuated armed forces’ lands and property, and requiring the allocation of revenues from such alienation to be used to establish alternative military cities and areas. Article 1 of the Decree obliged a newly created entity/authority to utilize the revenues to prepare alternative military areas in order to replace evacuated lands. The Presidential Decree No. 223 of 1982[3] created this Authority, the Armed Forces Land Projects Authority, which later became entitled to undertake a long list of activities including the incorporation of all forms of companies.[4] Articles 2 and 3 of the Decree regulate the alienation procedures through requiring this to be done through an auction. In addition, the alienation price should not be less than that of similar lands and property. However, the Decree and its amendments ignored defining the similar pricing concept. Such price is likely to resemble the market price.[5] Moreover, Article 3 forced the highest bidder to pay in cash or cheque one quarter of the land’s price and to pay the remainder at the conclusion of the primary contract. The same Article entitled the highest bidder to settle the remaining amount through fixed installments of five years’ period, in addition to a specific interest. Article 4 allowed the competent Authority to lease lands considered non-alienable by the Minister of Defence based on the national security concerns. Finally, Article 5 determined that the returns shall be principally directed to preparing and equipping alternative military areas. Additionally, the Article allowed utilizing 20 percent of the revenues for armament purposes if a relevant presidential decree to that effect is made.
The Latest Amendments
The latest Decree amended Article 1 of the 1981 Decree. According to that amendment, the Armed Forces Land Projects Authority now has the right to incorporate all forms of companies solely or in partnership with national or foreign capital. The second amendment subjected the process of land alienation to the provisions of the Tenders and Bids Law No. 89 of 1998[6] and its Executive Regulations replacing the auction system which used to apply formerly.
Conclusion
Reviewing the amendments proposed by the latest Presidential Decree, it becomes obvious that the main addition in comparison to the above mentioned Decree is the eligibility to incorporate companies in partnership with the private sector including Egyptian and foreign capital.   [1] Presidential Decree No. 446/2015 amending Presidential Decree No. 531/1981, Official Gazette, Issue No. 48 (bis) (b), 29 November 2015. [2] Presidential Decree No. 531/1981 on the rules governing the alienation of the evacuated armed forces’ lands and property and the allocation of these revenues to establish alternative military cities and areas, Official Gazette, Issue No. 42, 15 October 1981. [3] Presidential Decree No. 223/1982 amending Presidential Decree No. 531/1981 on the rules governing the alienation of the evacuated armed forces’ lands and property and the allocation of these revenues to establish alternative military cities and areas, Official Gazette, Issue No. 21, 27 May 1982. [4] Presidential Decree No. 224/1982 on the regulation and authorities of the Armed Forces Land Projects Authority, Official Gazette, Issue No. 21, 27 May 1982. [5] The Unified Arab Civil Code produced by the League of Arab States defines “similar price” as price determined in natural conditions in one market in a given period of time; see Unified Arab Civil Code, League of Arab States, Committee of Arab Ministers of Justice, Arab Centre for Legal and Juristic Research, available through this link (Arabic). [6] Law No. 89/1998 issuing the Tenders and Bids Law, Official Gazette, Issue No. 19 (bis), 8 May 1998.
Presidential Decree No. 446 of 2015[1] made minor amendments to a previous Presidential Decree issued in 1981 regulating the sale and alienation of lands belonging to the armed forces.[2] The new Decree entitled the competent Authority - Armed Forces Land Projects Authority – to alienate lands evacuated by the armed forces through incorporation of companies solely or in partnership with national and foreign capital. The alienation of these lands has to be in accordance with the provisions of the Tenders and Bids Law. In this context, it is beneficial to provide a brief highlight of the original legal framework guiding this issue in order to clarify the importance of the latest amendments.
The Initial Decree
The 1981 Decree was one of former President’s Anwar El-Sadat latest decrees. The Decree consists of five Articles prescribing the rules governing the alienation of evacuated armed forces’ lands and property, and requiring the allocation of revenues from such alienation to be used to establish alternative military cities and areas. Article 1 of the Decree obliged a newly created entity/authority to utilize the revenues to prepare alternative military areas in order to replace evacuated lands. The Presidential Decree No. 223 of 1982[3] created this Authority, the Armed Forces Land Projects Authority, which later became entitled to undertake a long list of activities including the incorporation of all forms of companies.[4] Articles 2 and 3 of the Decree regulate the alienation procedures through requiring this to be done through an auction. In addition, the alienation price should not be less than that of similar lands and property. However, the Decree and its amendments ignored defining the similar pricing concept. Such price is likely to resemble the market price.[5] Moreover, Article 3 forced the highest bidder to pay in cash or cheque one quarter of the land’s price and to pay the remainder at the conclusion of the primary contract. The same Article entitled the highest bidder to settle the remaining amount through fixed installments of five years’ period, in addition to a specific interest. Article 4 allowed the competent Authority to lease lands considered non-alienable by the Minister of Defence based on the national security concerns. Finally, Article 5 determined that the returns shall be principally directed to preparing and equipping alternative military areas. Additionally, the Article allowed utilizing 20 percent of the revenues for armament purposes if a relevant presidential decree to that effect is made.
The Latest Amendments
The latest Decree amended Article 1 of the 1981 Decree. According to that amendment, the Armed Forces Land Projects Authority now has the right to incorporate all forms of companies solely or in partnership with national or foreign capital. The second amendment subjected the process of land alienation to the provisions of the Tenders and Bids Law No. 89 of 1998[6] and its Executive Regulations replacing the auction system which used to apply formerly.
Conclusion
Reviewing the amendments proposed by the latest Presidential Decree, it becomes obvious that the main addition in comparison to the above mentioned Decree is the eligibility to incorporate companies in partnership with the private sector including Egyptian and foreign capital.   [1] Presidential Decree No. 446/2015 amending Presidential Decree No. 531/1981, Official Gazette, Issue No. 48 (bis) (b), 29 November 2015. [2] Presidential Decree No. 531/1981 on the rules governing the alienation of the evacuated armed forces’ lands and property and the allocation of these revenues to establish alternative military cities and areas, Official Gazette, Issue No. 42, 15 October 1981. [3] Presidential Decree No. 223/1982 amending Presidential Decree No. 531/1981 on the rules governing the alienation of the evacuated armed forces’ lands and property and the allocation of these revenues to establish alternative military cities and areas, Official Gazette, Issue No. 21, 27 May 1982. [4] Presidential Decree No. 224/1982 on the regulation and authorities of the Armed Forces Land Projects Authority, Official Gazette, Issue No. 21, 27 May 1982. [5] The Unified Arab Civil Code produced by the League of Arab States defines “similar price” as price determined in natural conditions in one market in a given period of time; see Unified Arab Civil Code, League of Arab States, Committee of Arab Ministers of Justice, Arab Centre for Legal and Juristic Research, available through this link (Arabic). [6] Law No. 89/1998 issuing the Tenders and Bids Law, Official Gazette, Issue No. 19 (bis), 8 May 1998.