30 October 2011 Last updated at 04:03 GMT

Planning hurdle for Orascom Swiss Alps luxury project

By Imogen Foulkes BBC News, Andermatt

In the heart of the Swiss Alps, a massive building project is under way, aimed at offering the height of luxury to wealthy visitors.

The village of Andermatt, population just 1,300, is hoping the project will revive the flagging local economy.

For years the village did well out of the Swiss army, whose mountain regiments were based there. However, following defence cuts, the army pulled out and the village lost a vital part of its income.

But help, it seemed, was at hand, in the form of Egyptian billionaire property developer Samih Sawiris, who took a look at Andermatt and decided it was ripe for development.

Mr Sawiris's Orascom company has already built luxury resorts on the Red Sea and in the United Arab Emirates.

These resorts operate as independent towns in their own right, and this is exactly what is planned for Andermatt - or rather, next to Andermatt.

Forest of cranes

The first key piece of planning permission was granted five years ago, when the Swiss government gave Orascom an exemption from Switzerland's property laws, thus allowing non-Swiss citizens to both buy property in Andermatt and sell it on to non-Swiss.

This was a crucial step, because Mr Sawiris's vision for his new Alpine resort includes not just hotels, but 30 upmarket villas and almost 500 luxury apartments.

An equally important step was convincing the local population in Andermatt that a project on this scale was really what they needed.

At town hall meetings, Mr Sawiris promised the local community would benefit from use of the resorts' new sports and spa centre, and undertook to ensure all new buildings would meet environmentally friendly standards.

So now the bulldozers have arrived, and local people are beginning to see just how vast this project will be.

Andermatt's Alpine skyline is a forest of cranes, and the air is filled with the noise of cement mixers and diggers.

The new resort will be at least as big as the original village. One traditional chalet has already been dug up and moved two metres, in order to make way for a hotel entrance.

What is more, the brochures promise the resort will have its own "nucleus", with its own designer shops and gourmet restaurants.

Of course, all of this comes at a price. Samih Sawiris estimates his investment at $1.5bn (£1bn) and the smallest resort apartment, just 30 sq m, will cost more than $500,000.

'A brutal change'

As the resort takes shape, doubts are beginning to surface.

Andermatt's local doctor, Andreas von Schulthess, has opposed the project from the start, and now believes his worst fears are being realised.

"It's just huge and nothing else," he said.

"It doesn't fit in Andermatt as it was before. It's really a forcible development of this originally small place which had a certain charm. For me, it's really a cruel, a brutal change, of Andermatt."

Other villagers, like farmer Maja Regli, worry that local small businesses will see little benefit.

"We would really be happy if some of the new visitors come to the village and use our shops," she said.

"Because in the last few years so many have closed down, we don't even have a chemist anymore, and that's terrible."

Cows and golf

But Mrs Regli still believes Andermatt had little option but to go along with the Sawiris project.

"Something had to happen, there had to be an investor, and now Sawiris has come and the problems are solved… well probably, I don't know," she said.

The Regli family are especially happy that they can continue farming, because their farm lies right in the middle of the planned 18-hole golf course.

Originally the farmers there were told they would have to sell up and leave, but after talks with Mr Sawiris, some have been able to stay.

"This farm has been in my husband's family for ever," explained Maja Regli. "And my daughter wants to continue farming."

"But we don't know now what it will be like in two or three years when they are playing golf, yes, we are wondering about that."

Ski issue

The first five-star hotel is due to open in 2013 and sales of the villas and apartments are proceeding, but apparently not especially briskly.

There is one very important obstacle: the key to making the resort a success lies in upgrading and extending Andermatt's rather dilapidated ski area.

Unfortunately for Mr Sawiris, he did not include the upgrade in his original plans, and the ambitious project he has now presented, involving the construction of several new ski lifts, is certain to attract opposition from environmental groups.

Laws on extending ski areas are especially strict in Switzerland and any formal opposition could drag on for years.

The doubts have caused rumours that the Swedish engineering company planning to build the lifts may pull out.

This has led to even more rumours, that Mr Sawiris may abandon the entire resort if he does not get his way over the ski lifts.

Some in Andermatt now fear they will be left with nothing more than a vast building site.

But Mr Sawiris, while not keen to be seen as the saviour of the village, still insists that everyone will benefit from his plans.

"From every project I do, I make sure that everyone around it is a winner," he says.