CAIRO: An Egyptian authority assigned to examine the sale of land in Talaat Moustafa’s (TMG) real estate Madinaty project recommended a court scrap the contract, a report from the authority said.

The state commission filed the report to the High Administrative Court, which will conduct a session on the case later on Sunday.

A lower court ruled last month that the New Urban Communities Authority (NUCA), a body under the Housing Ministry, broke the law by selling the land directly to a TMG unit without opening it up to bidding. It said the contract should be scrapped.

NUCA and TMG later appealed. The ministry body also filed a second lawsuit against the ruling at a misdemeanor court that postponed its hearing until Sept. 18.

Both the firm and the housing minister have said building would continue on the Madinaty project on Cairo’s outskirts.

The developer said the ruling could slow residential sales at the project and hurt the company’s share price, but the effects would be short-term.

The Madinaty project will include homes, schools, shops, hotels and a golf course, the company says. Construction on the land is underway and many homes are already sold.