The Administrative Capital for Urban Development (ACUD) is holding the bill for constructing the New Capital’s Nile water line at a cost that has more than doubled to around EGP 40 bn. To offset this jump in cost, ACUD asked the government if it could set its own water tariff but was told it was not feasible, Nageh Ibrahim, ACUD’s general manager of utilities, tells EnterpriseAM.

The line itself is running ahead of schedule. Trial operations are set to start on 30 April 2027, two months before its 30 June 2027 contractual completion date, Ahmed Hany, Hassan Allam Construction’s project manager for the Nile water transmission line, told Rania El Shamy on ON’s televised program Taamir (watch, runtime: 00:20-04:05). The contractors building the line include Hassan Allam Construction, Orascom Construction, Arab Contractors, and a fourth undisclosed company, Hany tells EnterpriseAM. Once running, the line will carry raw Nile water from a main intake on the river to the capital’s treatment plant.

Who writes the check

On price, ACUD thought it had a case to convince the government to let it set its own water tariffs. Typically, the state budget covers city and governorate water projects and leaves companies to run them, Ibrahim tells EnterpriseAM. But here, ACUD is doing it all: it paid for the line to be constructed, owns it, and runs it. The original estimate was EGP 15-19 bn, and changes in the exchange rate alone took it to nearly EGP 40 bn, he says. The developer planned to recover that difference through its water rates.

The issue is that only the Cabinet can set water tariffs, which are based on studies from the water regulator and Housing Ministry decrees. These require every developer in the new cities to meter customers and charge the official rate, without exception. Subsidies to state water companies jump to EGP 5 bn in the FY 2026/27 budget, up from EGP 2 bn budgeted in the Finance Ministry’s FY 2025/26 statement (pdf).

So ACUD owns the line, but it can’t set the price. “We tried to set our own tariff,” and the government said it wasn’t possible, he says. The new water utility law hasn’t changed the rules, either. The only way ACUD could fold its capital costs into consumers’ bills in the future would be if the government got rid of the tariff entirely and freedup the water price, Ibrahim says.

How the line is built

Three parallel pipelines carry the water 49 km from the Nile intake — through five lifting stations — to the treatment plant. Each is 2.2k mm wide, Hany tells EnterpriseAM. The 1.5 mn cbm a day goes in stages. The intake and the first lifting station are being built to full capacity, he says, while the other four stations start at 800k cbm a day, roughly half the total. The treatment plant follows the same pattern, in four phases. The first, now underway, will handle 400k of its eventual 1.5 mn cbm a day using dynamic sand filters.

For the contractors building the line, the biggest challenge has been the ground conditions. At the intake, close to the Nile, the groundwater sits high, so construction workers sank concrete diaphragm walls 41 meters underground to hold it back, Hany explains. The route also brings its own challenges. It cuts through mountains to depths of up to 30 meters and crosses flash-flood channels and valleys that had to be filled 30-40 meters high, he says.

The pipeline was routed through farmland, property had to be expropriated, and cemeteries had to be moved. The Cabinet advanced the regulations with a decree in November 2020 that made the project a public-benefit work and let the state seize the land it needed directly. Supply chains never held up the work, Ibrahim says, because “the pipes and equipment were secured early on,” even though the changing exchange rate pushed up the bill.

BACKGROUND- The contract was awarded in 2019, a year before the Cabinet’s decree. Back then, the capital got its water through lines from 10th of Ramadan and New Cairo, according to the same Cabinet statement.

From temporary lines to the Nile

The capital still runs on the lines from 10th of Ramadan and New Cairo. Two 1k mm pipes, one running 34 km from the 10th of Ramadan plant and the other 33 km from the New Cairo plant, “have a combined capacity of around 225k cbm a day,” Ibrahim tells us. A third line from 10th of Ramadan is nearly done and will add 100k cbm, taking capacity to around 300k cbm, enough to last five years.

The New Capital won’t need them that long. The Nile line will become the capital’s permanent, primary water source, according to pipe supplier the Egyptian Company for Prestressed Concrete (ECPC). The old lines will stay on as a backup. At full capacity, its 1.5 mn cbm a day will serve 87k feddans, the whole of the New Capital’s first and second phases.

Right now, the capital has 10k residents. ACUD is aiming for 50k residents by the end of 2026, a small slice of the 6.5 mn the city was designed for, according to a November 2019 Cabinet statement. Even then, the city will use about 10k cbm a day, less than 1% of the 1.5 mn cbm the new Nile line is built to carry.

Squeezing the running costs

With no option to impose its own prices, ACUD is focused on cutting costs. The line runs entirely on modern technology to keep operating costs down. A supervisory control and data acquisition system runs it, cuts losses, and tracks water quality, turbidity, and chlorine levels around the clock, Ahmed Elzayat, founder and CEO of Engineering Management System (EMS), whose firm specializes in smart cities, tells Enterprise. It covers every stage from the intake to the distribution points, along with a separate leak control system that “monitors the full 49 km of transmission lines in real time,” Hany says. Both feed into the capital’s crisis management center.

In new cities like New Cairo, where stations are modern and metered before and after pumping, the loss rate is “zero,” Elzayat says. Older networks are more complicated and “technology can’t stop leaks from dilapidated pipes in the older governorates,” he says. It can only spot them in real time, cutting repair times from five hours to a few minutes.

On older networks, smart meters do the heavy lifting. They catch leaks early and give operators the data to price water smartly and improve service, Mostafa Ashour, managing director for Africa and Asia at Iskraemeco, Elsewedy Electric’s water and energy management arm, tells EnterpriseAM. For plants, that means lower operating costs. On existing networks, Iskraemeco’s technology cuts losses by 20-30% within a year, Ashour previously told EnterpriseAM.

For phases three and four, ACUD may eventually turn to desalination. The developer expects that by the time those phases start, the technology to pull salts out of desalination brine will be viable, sparing plants on the Gulf of Suez the effects of rising salinity. For now, desalination plays a small role. It supplies about 1% of Egypt’s water, according to Water Resources and Irrigation Minister Hani Sewilam’s figures, and he says it “will not replace Nile water.” “The Nile will cover our water needs for more than 20 years,” Ibrahim tells us.

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