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Monday, 26 April 2021

Three scenarios for how the private sector could help Egypt’s railway

Here’s what private sector involvement in Egypt’s railways might look like: The government is mulling establishing three JVs with foreign rail companies to manage Egypt’s railway network as part of plans to bring in the private sector to improve the country’s ailing railway system following a string of deadly accidents, Al Mal reports, citing unnamed sources in the know.

Scenario #1- Each company would manage a geographic section of the network: One would be assigned to the Upper Egypt lines, one to the Lower Egypt lines, and the third would manage the suburban short-distance railway tracks, sources said.

Scenario #2- One firm to run them all? The government could contract an international company that would be held responsible for managing a certain number of passenger cars, or all of them, depending on the company’s technical capabilities. This company would be mandated with improving passenger rail services and reducing losses.

Scenario #3- Divvying up and managing new rail cars: The Transport Ministry would assign the existing air-conditioned railcars and the new 1.3k railway cars from Russia's Transmashholding to a foreign player to manage. The Egyptian National Railways (ENR) would only be left responsible for non-air conditioned railcars until they are taken out of service, sources said. Transmashholding has so far delivered 260 railcars under a EGP 22 bn contract signed with ENR back in 2018.

Whichever way it goes, the private sector’s involvement isn’t going to take hold before 2022. Regardless of the time needed for the Transport Ministry to study the scenarios and make a choice, it is highly unlikely that any company would agree to assume responsibility for Egypt’s railway infrastructure as it currently stands. The wait time is necessary until the country’s railway signaling system is upgraded and ENR takes receipt of the remaining Transmashholding railcars next year, the sources said.

BEFORE YOU GET YOUR HOPES UP- This does not mean the railways will be privatized: Plans to involve the private sector in revamping Egypt’s rail sector do not mean the government is looking at railway privatization, Transport Minister Kamel El Wazir said as he addressed the House this morning to present the railway development plan, the local press reports. El Wazir had been speaking today in a special hearing of the House of Representatives on the recent spate of train derailment.

Bringing in the private sector to manage the country’s railways had originally been in the works back in 2018, when the Transport Ministry began procedures to establish private sector-run companies to manage each railway, but it appears these plans fell by the wayside. After the recent rash of rail accidents, culminating in last week’s derailment near Qalyubia’s Toukh, it appears these plans are now being revived.

Reducing congestion will be a major feature of the development plan, El Wazir said, adding that a second railway track connecting Cairo with the Delta and Upper Egypt is essential One line is not enough to absorb the increasing capacity of passengers and commuters, he told representatives.

Addressing the “human” elephan…sorry…element in the room: El Wazir made did not mince words when calling out unqualified workers operating the lines. He called on MPs to amend the Civil Service Act to enforce tougher penalties for railway employees linked to extremist networks or substance abuse, according to Al Mal. El Wazir also pointed to repeated instances of vandalism that the tracks are regularly subjected to, Youm7 reports.

READ OUR LAST ISSUE OF HARDHAT to learn why poorly-trained staff is a major contributing factor to the recent series of rail accidents in Egypt.

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