A look at the EGP 2 tn push to upgrade Egypt’s transport infrastructure, with the help of the private sector: Over the past several years, some EGP 2 tn have been poured into transport infrastructure across Egypt, with the government pushing forward with an overhaul of infrastructure, machinery, and equipment. Railways have been the biggest focal point in this strategy: Some 10k km of railways have been upgraded, while several train cars have either been upgraded or swapped out for new ones. Meanwhile, the government has also been pushing forward with a plan to improve the overall service quality across transport services.

By the numbers: The government has earmarked some EGP 321 bn for government spending on transport projects in FY 2023-24, which will cover upgrading several roads between governorates, such as the Cairo-Ismailia Agricultural Road, the 6th of October-Wahat Road, and the Matrouh-Siwa Road. Railways are getting EGP 4.2 bn to build and develop 164 railroads and 166 train stations. Transport allocations in FY 2023-24 also cover the 6th of October-new capital monorail, resuming construction on the third and fourth phases of Cairo Metro Line 3 and the first phase of Cairo Metro Line 4, as well as overhauling Alexandria’s Abu Qir, and rehabilitating Alexandria’s tram. These spending plans come after the Transport Ministry worked on a five-year plan between 2017 and 2022 to overhaul the country’s railway network, including upgrading 1.2k km of rail tracks at a cost of some EGP 4.5 bn, spending EGP 15 bn on railway crossings, and upgrading railcars and locomotives for some EGP 40 bn.

Where has the money been coming from? The infrastructure development plan has been financed through a combination of government investments and loans from international development partners, in addition to a significant push from the private sector.

What kind of upgrades has the country’s railway network been getting? Developing the railways includes upgrading locomotives and railcars, updating the rail lines (including rail tracks, train stations, and train crossings), as well as upgrading railway crossing systems to improve railway safety.

There’s more being done to partner up with (but not sell to) the private sector: The Transport Ministry has received several proposals and offers from private sector companies to partner up with the government on operating the country’s railway network and other services, according to government sources Enterprise spoke to. Any public-private partnership plans would entail the government maintaining ownership of its assets, while relying on private sector partners to bring a higher quality of operation and management.

REMEMBER- Private sector players have recently been allowed into the action: A key component of Egypt’s plan to overhaul its railway system is turning to the private sector, which began in earnest in 2018 with the passing of amendments to the Railway Act that allow private sector participation in developing, managing, and operating railway projects. The Transport Ministry then began procedures to establish private-sector companies to manage individual railways, although little progress was made on that front after 2021, when the government was reportedly looking at plans to establish three JVs with foreign rail companies to manage Egypt’s railway network.

We’ve seen some private sector involvement in transport projects already materializing: The government tapped Gharably Integrated Engineering Company (GIEC) and 3A International earlier this year for a planned river transport line for cargo between Aswan and Sudan, sources told Enterprise at the time. There are also additional river transport projects for cargo that are expected to be announced soon, including a line connecting the Athar El Nabi station in Helwan to Upper Egypt, as well as another connecting the Al Maleh lock in Alexandria to Nubariya.

There’s also going to be a renewed focus on cargo transport: The government is planning to work on connecting different forms of transport to facilitate the movement of cargo and create an attractive offering to investors, our sources told us. Cargo will benefit from a more interconnected transport system that will connect ports, railways, and roads, which will increase government revenues from cargo transport, while providing a better service overall.

Your top infrastructure stories for the week:

  • EBRD money for new cities: The European Bank for Reconstruction and Development (EBRD) is investing EGP 927 mn to support the development and sustainable management of water and power infrastructure projects in new cities.
  • Concord x Neom: Local engineering and contracting firm Concord and two Saudi companies will together work on an SAR 10 bn (c. USD 2.7 bn) project in Saudi’s futuristic mega city Neom.
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