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Sunday, 29 May 2022

Orascom Construction, Siemens and Arab Contractors consortium ink multi-bn USD high-speed rail contract

Siemens Mobility, Orascom Construction (OC) and Arab Contractors have signed a contract with the government for the second phase of the planned 2k-km high-speed rail line, Siemens and our friends at OC said in statements yesterday (here and here, pdf). The consortium will design, install, commission and maintain the line for 15 years in what Siemens CEO Roland Busch called “the biggest order” in the company’s history.

The contract is for the second and third lines: The second line will run 1.1k km between Greater Cairo and Abu Simbel near the southern border, passing through Luxor and Aswan, while the 225-km third line will connect Luxor and Hurghada.

The initial contract was signed last year: The consortium signed a USD 4.5 bn contract to build the first phase of the line last September. This section runs 660 km between Ain Sokhna and Marsa Matrouh.

A world beater: This will be the sixth-longest and most-modern high-speed rail network in the world, Busch said. The project will connect 60 cities nationwide, with trains running at up to 230 km/h. “This means that approximately 90% of Egyptians will have access to this modern, safe, and integrated rail system,” the Siemens statement read, with the project slashing carbon emissions by 70 percent compared to traditional modes of transportation.

How much is this costing? It’s not quite clear. Neither of the companies provided a value for the contract, instead breaking it down into individual shares. Siemens said its total share of the combined contract is EUR 8.1 bn (c. USD 8.7 bn) while OC’s share is USD 1.8 bn. Arab Contractors’ share is unknown.

Siemens: The German conglomerate will supply 41 Velaro eight car high-speed trains, 94 Desiro high-capacity four car regional train sets, and 41 Vectron freight locomotives. It will install the signaling systems on all three lines, and deliver the power supply system for the project.

OC: Orascom is entering a joint venture with Arab Contractors to cover “the supply and installation of track works, installation of signaling and overhead catenary systems, telecommunication system, and traction power substations''. It will maintain the track and telecoms system for the 15-year period.

A big job-maker: “The consortium will directly create more than 40k jobs in Egypt, with an additional 6.7k at Egyptian suppliers and indirectly through the wider Egyptian economy,” the partners said.

What they said: OC CEO Osama Bishai called the line a “transformational project” that will boost the country’s infrastructure, industrial and tourism sectors. President Abdel Fattah El Sisi said that the line will mark “a new era in the railway sector in Egypt, Africa and the Middle East,” while German Chancellor Olaf Scholz said in a video statement (watch, runtime: 3:21) that the contract is “a milestone for Egyptian-German economic relations.”

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