Egypt suspends construction of new capital

Egyptian President Abdel Fattah al-Sisi has reportedly ordered a halt to fresh construction of the country's new administrative capital due to a "lack of funding".

The plans for the new capital were first announced in March 2015 and it has been touted as a solution to overcrowding, pollution and rising house prices in Cairo.

"There have been orders from the president to stop work on any new construction at the site of the administrative capital and to just continue with some buildings, which have already begun to be constructed in accordance with a deal struck with Chinese companies," an Egyptian official in the presidential palace told The New Arab correspondent Ibrahim al-Taher on Sunday.

The source speaking on condition of anonymity alleged that funds for the new capital had dried up forcing a freeze on new construction.

He added that other projects such as new residential cities in al-Alamein and Ismailia are similarly at risk of coming to a standstill.

Last month, The China Fortune Land Development Company agreed to provide $20 billion for the administrative city, after a meeting between heads of the firm and Sisi.

More than five years after its 2011 uprising - partly fuelled by economic disparities in the country - that swept away veteran dictator Hosni Mubarak, the country is still reeling from the fallout.

The uprising unleashed years of tumult that culminated with the military overthrow of former President Mohammad Morsi in 2013 and a part-jihadi inspired insurgency that has driven away tourists.

Since Morsi's overthrow, Sisi has attempted to revive the ailing economy by launching mega-projects with limited returns, such as the Suez Canal expansion project.

Arab states of the Gulf which opposed Morsi's Muslim Brotherhood have showered Egypt with over $20 billion in aid and investments, but that has proved to be a short-acting salve.

Cairo also faces a severe dollar shortage and a sharp drawdown of foreign exchange reserves at its central bank.