Its name is Sadat City, honoring Egypt's current President. Not much is visible there right now: a few prefabricated shacks, the shell of what is going to be a reception center for new arrivals, rows of young and spindly eucalyptus trees battered and bent in the roaring desert wind.

But it is at Sadat City, on a stretch of desert midway between Cairo and Alexandria, that Egyptian planners are going to take a lonely stand against the social problems that blight the lives of so many in Egypt today.

The most important of these problems are urban decay, housing shortages, unemployment, and overpopulation.

Sadat City, still under construction, is the most ambitious of seven new industrial communities that together will be home, if all goes well, for more than 4 million Egyptians within the next 50 years.

When young and committed engineers such as Hassan Abdel mataal survey this vast and forbidding expanse of sand, sky, and space, they see as many as half a million people living in comfortable two-story homes, enjoying an unpolluted and scientifically planned environment.

"This is one of our most important and, we hope, most successful projects," he says proudly. "It will become one of the main industrial bases in Egypt We have here all the prerequisites for life and industry at minimum cost."

In three years, Mr. Mataal himself will be living and working in Sadat City, as well as all of his colleagues in the Ministry of Housing and Reconstruction, now based in Cairo.

"In Egypt," he says, "you can never convince anyone of anything unless you yourself set the example." He adds that even the housing minister, Hasaballah al-Kafrawi, intends to bring his family to live in Sadat City.

Recent visitors, however, got a mouth and eye full of what Mr. Mataal and other early settlers in Sadat City may have to endure. A party of unsuspecting Cairo journalists was assaulted by khamsin, the relentless gale that comes howling across the desert in March and April, cutting visibility nearly to zero and leaving people's eyes and hair maddeningly full of sand.

But Sadat City, which is expected to receive its first wave inhabitants in 1982, is being developed with khamsin in mind. the eucalyptus and other trees have taken root, planners say, and will eventually grow into a "shelter belt" 70 meters wide and 6 kilometers long (75 yards by 3 3/4 miles) to protect the urban areas from the sand picked up by the dreaded desert wind.

The Ministry of Housing and Reconstruction has already spent more than $170 million in the last two years on the three desert cities under construction. Sadat City alone, in its initial stage, will cost $70 million, while in 10 years the government plans to commit more than $350 million to the entire project.

This is money that so far Egypt has had to raise and spend by itself. To date, the government has received not a penny for its proposed new cities from any international lending agency.

Mr. Kafrawi, the housing minister, says the government has not actively pursued foreign assistance, because it first wants to prove that desert cities can work. "Then," he explains, "when we invite international agencies to come and see what we have done, I think they'll be ready to contribute."

Some Western experts, however, believe that Egypt should not concentrate exclusively on building new cities to solve its urban problems. According to one, the country would do well to develop its existing cities at the same time -- not only Cairo but other, smaller urban centers where the infrastructure is already in place.

He says Cairo has possibilities for expansion to nonagricultural land, and he cites the barren, rocky hills that lie to the north of the city.

In the planning of the new cities, Mr. Kafrawi explains, EGyptian engineers inspected similar projects in India, Pakistan, Britain, France, Sweden, West Germany, and the United States. But one Western expert here says he knows of no other country, facing financial limitations as severe as those in Egypt, where so grandiose an effort is being made.

Sadat City, Then, is a multimillion-dollar gamble that Egypt is taking by itself. And the reasons for such a momentous step are evident to anyone who has watched Cairo slowly crumble away in the last few years beneath the crush of 10 million people, believed to be several times the number the city was designed to accommodate.

With private holdings of arable land averaging barely more than two acres, there has been a massive movement of people from the countryside to Cairo and Alexandria, Egypt's two principal cities. Planners predict that in five years, 50 percent of the population is this proverbially agricultural land will live in urban areas.

Today, Egypt's 42 million citizens are squeezed together on the 4 percent of the land that can be cultivated -- namely, in the fertile valley that runs along the Nile River and in its triangular-shaped delta north of Cairo. It is land that lately has been unable to produce enough to feed the masses. As a result, the country must import 40 percent of its food.

In the inhabited areas, population density, at 3,075 people per square mile, is among the highest on earth.

In the past decade, nearly a million acres of arid land have been irrigated and reclaimed for agriculture, but almost the same amount has been lost to urban and industrial sprawl. A law now prohibits any new industry from building on agricultural land.

For Egyptian planners, therefore, there is nowhere to go but the desert.

But Mr. Mataal argues that the new cities are not going up just to provide living and breathing room for the country's millions. Even when all the cities are built and inhabited, they will accommodate only 4 million people, making barely a dent in a population that increases by more than a million a year.

He says the desert cities are going to be self-sufficient industrial communities, and their primary objective will be to boost national productivity. In Sadat City, the priority is to get the factories built, with housing coming later. No one, furthermore, will be able to buy a home in the city unless he works there, either in industry, construction, or public services.

Some 300 investors have sought approval to establish plants in the new city, according to Mr. Mataal, 25 of whom have had thier projects accepted. In this early stage of growth, the accent will be on heavy, laborintensive industry. The projects already approved include factories for steel bars, cast iron, building materials, and automobile assembly.

Two requirements for industrial development -- water and electricity -- are available in abundance, Egyptian officials claim.

But as crucial as industry may be to the economic value of Sadat City, its viability as a social unit is more likely to depend on the type of housing it can offer.

The traditional multistory tenements usually found in public housing projects will not appear in Sadat City. Social planners here now realize that such structures are alien to the tastes of working-class Egyptians, many of whom have village roots and for whom land and property ownership are highly valued.

Instead, people who come to Sadat City will be able to buy a 7-by-20-meter plot of land (23 by 66 feet) on easy credit terms, on which the "core" of a finished house -- a kitchen, bathroom, and one room -- will be built for them. Then the residents themselves, who will already have jobs in Sadat City, can enlarge their homes according to income and architectural preference. When they finish, the land and the house will be theirs.

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