The Transport Ministry is set to bring 125 out-of-operation locomotives back to life under a USD 297 mn agreement with Advanced Power Dynamics (APD), the rail aftermarket parts and overhauls arm of Canada’s INPS Group, a senior government official told EnterpriseAM on Thursday. The 12-year contract to rehabilitate and upgrade 180 aging Henschel locomotives — including 55 already in service — plays into the government’s wider strategy of maximizing the efficiency of its existing fleet to support its push into freight transport and logistics.

The ministry also signed a EUR 54.9 mn agreement with Italy’s Salcef to modernize 300 km ofrailway lines. Spain’s Indra Sistemas also bagged a EUR 12.4 mn contract to upgrade contactless ticketing for Metro Lines 1 and 2.

Why it matters: By opting to rehabilitate — rather than simply purchase — 125 units, the state isn’t only saving money but ensuring that a lot of its spend goes into locally manufactured parts. Favouring rehabilitation over fresh purchases is a well-trodden path, with the Egyptian National Railways signing three contracts just last year worth over USD 235 mn with US-based Progress Rail to upgrade and maintain parts of the country’s locomotive fleet.

What’s next? We can expect a heavy focus on localization — with the government using these contracts to push for the local production of spare parts and maintenance activities to reduce the long-term FX drain of importing railway components.

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