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Wednesday, 10 November 2021

Egypt signs 21 major agreements to overhaul metro, railways + more

Breaking down the 21 new transport infrastructure agreements signed at TransMEA: Egypt signed a total of 21 new agreements with local and international companies at the TransMea 2021 transport expo on Monday and yesterday, according to ministry statements (here and here, both pdf). The agreements, which range from contracts for feasibility studies to funding to supply agreements, encompass the country’s railway projects, Cairo Metro, as well as maritime and inland logistics infrastructure. We break down the agreements signed under each of these infrastructure areas, and what they entail (including how they’ll be funded).

1- CAIRO METRO

French train manufacturer Alstom will provide 55 new trains for Cairo Metro Line 1 under a EUR 876 mn contract with the National Authority for Tunnels (NAT). Alstom will also supply spare parts and provide maintenance for the duration of the eight-year contract, financed by the French government.

Japan’s Mitubishi signed a EGP 5.8 bn contract to provide 23 trains for the first phase of Cairo Metro Line 4, which will link between Cairo, Giza and Sixth of October City in its first phase. In its second phase, the line will connect with New Cairo, the ministry said. Mitsubishi will also provide maintenance services for two years. A USD 1.2 bn loan from the Japanese International Cooperation Agency will contribute towards financing the contract.

A consortium between Spanish railway supplier CAF and Japan’s Mitsubishi landed a EUR 185 mn contract to overhaul 23 railcars operating on Cairo Metro Line 1. The contract will be paid partially in EGP and partially in EUR, and will be financed through a EUR 200 mn loan from the Spanish government. The two companies had expressed interest in the project last year.

The Transport Ministry signed an MoU with Spain’s CAF and Mitsubishi to upgrade and maintain the railcars for Cairo Metro Line 2, with a joint Spanish-Japanese financing offer to be drawn up and evaluated within the next two months. The final details of the contract should be ironed out and ready for signing in January 2022. Mitsubishi, the original supplier of the trains, will help CAF to evaluate their current condition and identify the required maintenance work.

South Korea’s Hyundai Rotem will partner with the National Egyptian Railway Industries Company (NERIC) to locally produce 320 railcars for Metro Lines 2 and 3, according to a framework agreement signed at TransMEA. This agreement comes as part of the government’s plans to localize the railcar manufacturing industry, the statement notes.

Coming soon: Cairo Metro Line 6. The NAT signed an MoU with a consortium of the UK’s Aegis Rail and France’s Setec to prepare preliminary feasibility studies for setting up a sixth metro line (Reminder: France is giving Egypt EUR 2 bn in credit facilities for the metro line, partially to encourage French companies’ participation). The line — which is expected to come with a EGP 62.4 bn price tag — will run from Al Khusus city to Tora El-Balad. The 30 km line saw its master contract awarded to US infrastructure giant Bechtel late last year.

2- RAILWAYS

The government’s infrastructure development plan puts transportation as one of the major priority areas, with some EGP 141 bn slated for railway development alone for a much-needed overhaul of the railway system from early 2020 through 2022. Railways and transport were two of the top priority areas laid out in the Madbouly government’s infrastructure public spending plan for the current fiscal year.

High-speed electric trains: Deutsche Bahn and DP Consulting signed an MoU with the NAT to present a bid to operate the first line of the high-speed electric train, which is expected to link Ain Al Sokhna with Matrouh. In September, the government had signed a USD 4.5 bn contract to build the country’s first high-speed rail line. A consortium of Siemens Mobility, Orascom Construction and Arab Contractors agreed with NAT to design, install and maintain the line, which will run 660 km.

US railway equipment provider Wabtec is supplying the Egyptian National Railway (ENR) with 100 new locomotives at an estimated cost of EUR 248 mn, financed by the European Bank for Reconstruction and Development (EBRD). The contract also includes an eight-year, EUR 157 mn fleet maintenance agreement. The company is expected to deliver the locomotives in 2023, according to a statement.

Other railway agreements:

  • Spanish train manufacturer Talgo is looking to provide us with seven sleeper trains, after signing an MoU with ENR;
  • Two framework agreements with Spain’s Thales and France’s Alstom to install new automatic signaling systems, along with modernizing and developing three railway lines in Egypt;
  • A cooperation protocol with Spain’s Revenga to supply ENR with an electronic ticket booking system;
  • An MoU with Germany’s Deutsche Bahn and Elsewedy Electric to set up technical and vocational training centers for railway workers and skill-building;
  • Another MoU with Deutsche Bahn and Elsewedy to provide consulting services to the ENR to improve its capacity to operate and maintain Egypt’s rail network;
  • An MoU with Austria’s Voestalpine to boost the output of the ENR’s workshop in Abbasiya.

3- MARITIME TRANSPORT

Abu Dhabi Ports (ADP) landed an MoU to build, operate, and manage a multi-purpose terminal at the Safaga Port. Under the agreement, which the port operator signed with the Egyptian Group for Multipurpose Terminals, ADP will need to run feasibility studies on the terminal. The Safaga Port terminal was one of nine proposed PPP infrastructure projects that were given preliminary approval by the cabinet in June. ADP had signaled earlier this week that it could invest as much as USD 500 mn in Egypt if it lands the Safaga Port contract, as well as a separate PPP contract to construct the 250-feddan dry dock in Tenth of Ramadan.

The Arab Company for Supply Chains signed an MoU to build, operate, and manage a new grain and oil terminal at the Dekheila Port. The terminal has been in the works for several years, with the EBRD expressing interest back in 2018 in helping Egypt launch the tender. Former Transport Minister Hisham Arafat had estimated at the time that the project would require an investment of USD 100 mn.

French shipping company CMA CGM signed a cooperation agreement to operate and manage the Tahya Misr multipurpose terminal in Alexandria Port by 2022.

A consortium of France’s Bolloré Transport & Logistics, Elsewedy Electric and the Egyptian Group for Multi-Purpose Stations also signed an MoU to design, build, manage and operate a multi-purpose terminal at the Ain Sokhna Port.

4- DRY PORTS

Two more MoUs for dry port feasibility studies: A consortium led by Egypt’s Special Group signed an MoU to conduct preliminary feasibility studies on the Damietta dry port, as well as a separate agreement to study the feasibility of setting up a dry port in Sadat City.

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