Egypt: Railway plans on track

In the wake of a tragic train accident at the beginning of 2013, Egypt is looking to step up investment in its railways to improve safety, and upgrade infrastructure and rolling stock. Plans for the development of new tracks are also being implemented with international support.

The government may look to spend up to LE45bn ($6.68bn) on upgrading the national railway network, according to Mohamed Sadek Sherbini, chairman of the transport committee of the Shura Council, the upper house of parliament, the regional press reported on January 16. Sherbini said LE15bn ($2.23bn) could be invested in safety equipment and automatic controls to reduce the risk of human error, and a further LE30bn ($4.46bn) for “renewal and development”, including new trains and the development of routes, particularly in Upper Egypt.

Sherbini was speaking after 19 soldiers were killed and more than 120 injured when a train travelling from Upper Egypt to Cairo derailed at the Badrashin station in Giza, a suburb of the capital. At the time of publishing, investigators were still trying to discover what caused the accident, but such events are not uncommon on Egypt’s extensive but poorly maintained rail system.

A recent report by the Ministry of Transportation suggested there are around 550 railway accidents each year. While the vast majority of these are minor, many people have been wounded or killed in recent years. A collision between a train and a school bus, which left 50 people dead in 2012, led to the resignation of the then-transport minister.

His replacement, Hatem Abdel Latif, was appointed by President Mohammed Morsy on January 9 with a specific brief to improve rail safety. The president has asked Latif to draw up a long-term plan for managing the railway sector. One of the minister’s first moves was to sign a deal for buying 221 new carriages; he says that 80-85% of the 3300 carriages currently owned by Egyptian National Railways (ENR) are past their life expectancy.

As well as the urgent priority of tackling safety issues and upgrading the rolling stock, this year should also see substantial investments in new track and staff. On January 9, the regional press reported that the Egyptian Railway Authority (ERA) would start the process of developing a new electric railway system connecting Cairo with Alexandria in March. The following month, the authority expects to hold an auction for the construction of a 250-km, $600m railway line from Beni Suef to Asyut in the north of the country.

Both projects are being funded by a loan from the World Bank and are part of a five-year development plan for Egypt’s railways. The $270m Cairo-Alexandria line is expected to be completed within four years, while construction on the Beni Suef-Asyut stretch should start in January 2014, once the ERA obtains a $330m loan from the World Bank. Applicants will be qualified and vetted by the authority with World Bank support.

The ERA is now also seeking further funds to construct a line from Zagazig in the Nile Delta to Cairo, which would link to an existing track from Zagazig to Port Said on the Mediterranean, near the entrance to the Suez Canal. The authority is extending the bidding period for the construction of 150 new stations to February, after some bidders requested more time.

Investment in railways is certainly capital-intensive, and the high cost of maintaining and consistently improving Egypt’s extensive network of 6700 km goes some way to explaining the system’s challenges. However, investment can pay off, not only in enhancing safety and saving lives but in lowering transport costs for the country as a whole.

Rail transport is usually significantly cheaper than road transport, a fact that will not be lost on Egypt’s growing industrial sector; the numerous and sizeable investments planned by Gulf states in railways indicates that the age of rail is far from over. Furthermore, good railways take pressure off roads, something that would be beneficial for Egypt, particularly in crowded urban areas such as Cairo.

Given the cost of developing rail, Egypt may need to look to tapping more international sources of funding, and perhaps also consider using an element of private financing and ownership. Over the longer term, the country may need a network that is smaller, but more efficient and focused on areas of high population and industrial development.

Read Next:

In Africa

Ghana banks eye acquisitions, foreign credit to expand

In spite of a softer macroeconomic environment, Ghana’s banking sector is in good health, thanks to an increase in assets and strong capital ratios, which in turn is encouraging an expansion by...

In Transport

Mongolia lays tracks to boost trade

Recent visits to Mongolia by Chinese and Russian Presidents, Xi Jinping and Vladimir Putin, have cemented deals that may see the mineral-rich country double trade with its neighbours and achieve a...

Latest

Ghana banks eye acquisitions, foreign credit to expand

In spite of a softer macroeconomic environment, Ghana’s banking sector is in good health, thanks to an increase in assets and strong capital ratios, which in turn is encouraging an expansion by...