A COMPANY whose portfolio includes creating a town on the Red Sea coastline has been chosen to develop a multi-million pound eco-town in Cornwall.

Orascom Development, which has headquarters in Switzerland but is well-known in Egypt and throughout the Middle East, will work with clay mining firm Imerys and other agencies to create a low-carbon town on former mining land around St Austell.

The town would be built in phases, on six sites totalling 700 hectares in the St Austell area, creating around 5,000 jobs and 5,500 homes – of which 40 per cent would be affordable housing stock.

It will be the first time Orascom has developed in the UK, though it is developing a similar eco-town in Switzerland.

The company, which has been established for more than 20 years, also boasts developments in Egypt and the United Arab Emirates which include lavish six-star and five-star hotels, villas and a championship golf course.

Ashley Shopland, operations director of Imerys, which submitted plans for the eco-town, said Orascom was fully capable of delivering housing at the other end of the market.

"This is not a risk – it is a new set of challenges. We have taken our time to pick the right company to work with, and Orascom's vision matches our own.

"We both want to regenerate the mid-Cornwall area, but with respect to a number of factors. For example, we want something that is employment-led and creates an environment where people want to live and work."

Mr Shopland said Imerys had entered serious discussions with "a few" companies, both in the UK and abroad, before yesterday's announcement that it would work with Orascom.

Samih Sawiris, Orascom Development's chairman and chief executive, described winning the contract as a "dream come true". He said: "Cornwall has so much potential. You have the seaside and the beautiful nature. There's so much space and a lot of supply of people for an eco-town.

"I normally go to places where there is nothing (no existing population) and start from scratch, so this is a dream come true and an amazing project."

The development – planned for sites at Goonbarrow Refinery, Baal Pit, Par Docks, Nanpean and Drinnick, Blackpool Pit and West Carclaze – would create a town producing zero-carbon emissions, with 40 per cent of land designated green space, as part of the Government's eco-town initiative.

The project would take an estimated 15 to 20 years to complete, providing it wins planning permission.

Mr Sawiris, who was visiting Cornwall for the second time for yesterday's announcement, said it was vital to listen to the views of the public. "We have a lot of homework to do in terms of finding out about the area. In the process of building a town, we have to listen, listen, listen."

A first planning application may be submitted by the end of next year.