Big Project ME looks at the impact railway investment will have on Egypt’s economic revival
Four years after a populist uprising that tore down the Hosni Mubarak regime and two years on from the ill-fated reign of Mohamed Morsi, Egypt has finally begun to put itself back together again after a time of tremendous uncertainty.
With billions being poured into Egypt as it looks to rebuild its shattered infrastructure and economy, there is a definite sense of optimism and positivity returning to the land of the Nile. In January 2015, President Abdel Fattah El Sisi made his first official visit to the UAE, where he urged investors to come and invest in his country.
“We welcome you in Egypt and will provide an appropriate investment atmosphere. There are genuine investment opportunities in Egypt,” he told an audience of businessmen in Abu Dhabi. Pointing out that the Cairo government alone would not be able to meet Egypt’s economic ambitions, he entreated “Egyptian, Arab and foreign investors” to help upgrade the Egyptian economy.
Egypt and its rulers are clearly ready to welcome investors in its economy with open arms, most importantly to help create jobs for its 87 million people (2014 estimates). The largest segment of the population is the 38.4% between 25 and 54 years of age. It’s easy to see why the Egyptian government is so keen to invest in key infrastructure projects, as they lay the groundwork for an economic recovery that could have huge implications for the entire MENA region.
Chief among these investment projects is a $2 billion cash injection at the end of 2014 to modernise and upgrade the Egyptian railway and metro infrastructure. In an interview conducted with Daily News Egypt in November 2014, Hany Dahy, Minister of Transportation for Egypt, outlined the task facing his country.
“The Ministry of Transportation is in a race against time to complete a feasibility study for the high-speed train project to be presented during the economic summit in March [the Egypt Economic Development Conference in Sharm El-Sheikh]. This includes the construction of one rail line between Alexandria and Aswan and another between Hurghada and Luxor, with an initial estimated cost of $2.5 billion.
“The aims of the Alexandria-Aswan rail line are to link the north Delta with the Nile Valley with high-speed trains that travel up to 350km/h. The line will be constructed on an elevated path on a bridge and will be completely isolated from both sides to ensure the highest levels of safety and security. Five stations will be constructed for the line – in Alexandria, in Giza, Assiut, Luxor and Aswan.”
The project will stretch for more than 1,000km. Each station will have a passenger capacity of 10 million a year, while an electric rail line with speeds of up to 180km/h will also be built under the high-speed rail path. The electric train will link the capitals of the provinces along its track line.
With the Egyptian National Railways having undertaken a programme that will renovate the whole railway line running along the Nile River, this ambitious project will pose major challenges to all stakeholders, as Pascale Grasset, business development director, Alstom Transport North and Central Africa, explains.
“Egypt is a huge country with its population mostly concentrated along the Nile. Therefore, you have this railway line coming from the upper north of the country – from Alexandria – through to Cairo and then down to Aswan in the extreme south of the country,” she tells Big Project ME. “Along the Nile River, the need to renovate the line is huge, because almost the entire network is more than 25 years old, and therefore it has been built with traditional technology. There is a huge need to modernise.
“The objective is to increase the performance of the transport systems. Egypt’s government wants to enhance the comfort, security and safety of the passengers. They also have projects that aim to expand their transport network because the population is expanding and therefore there is a need to transport people in and between cities.”
Alstom has been awarded a $113.26 million contract by Egyptian National Railways to supply signalling equipment for the 240km Beni Suef-Asyut line. The contract will also include maintenance for five years. Delivery is expected to start in 2016, and the system is due to be operational by January 2019.
The French giant will be providing Smartlock, its new Electronic Interlocking System (EIS), to replace the electromechanical systems currently in place. In addition, it will replace trackside equipment, power supplies and telecommunication systems. Alstom says that its systems will help ensure safety for passengers while increasing the number of trains in circulation on the network by more than 80%.
“Signalling is one of the parameters that counts for a lot when enhancing the performance of the line, its capacity and safety,” explains Grasset. “We have the ambition to propose the relevant solutions for the customer’s will to modernise the line. The technology which was implemented on the line is more than 20 years old. A more modern technology will offer better performance, more comfort, a higher number of trains and will save on operating costs,” she adds.
“Therefore, the idea to go to a completely electronic interlocking is the object of this modernisation program. The advantage is that the system is cheaper. That does not represent the cost of investment to install the new one instead of the old one, but the objective is to have much lower maintenance costs. When you compare the maintenance costs of electronic devices to electromechanical ones [it’s much lower],” she says.
“This better performance means increasing the capacity of the line. Today, to preserve safety, you have to limit the number of trains when you use the old system. With the new one, the limit will be increased [tremendously].”
Minister of Transportation Hany Dahy adds that his ministry is also studying how to make rail transport account for 10% of all goods transport, instead of the current 1%. Towards this end, three railway lines will be constructed – a Wahat-Imbaba-Itay Baroud line, a Tebeen-Roubky line and a 10th of Ramadan-Belbeis line.
Alstom is also waiting for the next major decision from Egyptian National Railways, which will be for what is known as the Delta Line, running from Banha to Zagazig. “The tender is ongoing and we’re expecting a decision in the coming months,” Grasset says, adding that Alstom’s bid was submitted in September. “We also are expecting that ENR will issue tenders for what is missing. That means the railway between Cairo and Beni Suef and the last slice, which will be the line from Asyut to Aswan.”
Interestingly, in April 2014, the Ministry of Transportation signed a Memorandum of Understanding with the Chinese government and the Aviation Industry Corporation of China for the development of a new $800 million railway project. This 80km two-way railway will be the first to use an electric traction system and will connect Bilbeis City, Sharqeya and El-Salam City in greater Cairo. It will also link with the third metro line currently under development in Cairo. As part of the MoU, China offered complete designs and final studies for the implementation, as well as the project’s costs and timeframe.
Clearly, President Sisi isn’t the only one confident that Egypt is bouncing back.