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... And sues over unpaid fees on Egypt scheme

Foster & Partners is heading for a High Court showdown in a row over unpaid fees on a £1 billion development in Egypt.

The practice is suing for a staggering £2.3 million after the development team behind the Serrenia resort scheme on the Red Sea failed to cough up.

The news comes just over a week after Foster unveiled even more ambitious plans in neighbouring Libya to transform an area the size of Wales into the world's largest carbon-neutral regeneration zone (AJ 13.09.07).

The writ, which was filed at the High Court this week, says that in December 2005, Foster agreed fees of £9.5 million to design the 263ha Serrenia project.

The firm had also asked for expenses of 10 per cent, and a pre-work fee of £500,000.

When completed, the development will boast 736 holiday homes - including palaces, villas and apartments - as well as a 200-room seven-star luxury hotel, a spa, an 18-hole golf course, restaurants, retail areas and a marina.

However, Foster & Partners has not received a penny from either project manager Bruges Tozer International or partner Shaheen Business and Investment Group, which provided financial guarantees.

The practice has repeatedly billed Bruges Tozer for its services and expenses, sending seven invoices between December 2006 and June 2007.

The only attempt made at settling up was by contract signatory Khaled Shaheen, chairman of the Shaheen Business and Investment Group, who, after receiving the first invoice, wrote a cheque for $980,000 (£490,000) dated 21 January 2007.

Shaheen also signed a cheque for £185,000 on 22 January 2007, but it is alleged that both cheques bounced when presented for payment.

Now Foster is suing the two companies for a total of £2,385,282 plus interest amounting to £58,453, which is increasing by £464 a day.

The court case is the latest upset for Foster & Partners in the Middle East. The practice had hoped to land the prize project of a new canal linking the Red Sea and the Dead Sea. Unfortunately for Foster, which had drawn up early feasibility studies for the waterway, the practice was not shortlisted.

A hearing date has not yet been set. Foster & Partners has declined to comment.

By Sarah Limbrick and Richard Waite

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