Egypt has opened an investigation into the fatal train collision that occurred in Korshid, east of Alexandria, on 11 August, according to local media reports.

More than 42 people were killed and more than 100 injured when a train from Cairo headed to Alexandria rammed into a stationary train en route to Alexandria from Port Said. Reports indicated the engine of the first train and two wagons of the second train were thrown off the rail tracks.

Some sources indicate the accident was caused by human error, while others have indicated a glitch in the railway switching system could have been behind the collision.

Several employees of the Egyptian Railways Authority, including two senior operation managers and two watch tower observers, are understood to have been suspended.

A lack of financing has hampered Egypt’s long-overdue plan to modernise and restructure its mainline railway sector.

A key milestone is expected over the next few weeks, with the signing of three separate contracts with US-based GE for the supply of 100 new locomotives, maintenance of 81 old locomotives and a 15-year technical support agreement.

The terms for the first two contracts are understood to have been finalised, while the terms for technical support agreement are still being negotiated.

According to sources familiar with the transaction, the three contracts, which together are estimated to be worth up to $575m, could be awarded in August.

A $300m loan agreement with European Bank for Reconstruction & Development (EBRD), which will cover part of the deal, was signed on 19 June.

Upgrading the rail network’s signalling systems is another urgent priority for Egypt. Several fatal accidents have occurred in recent years, largely due to signalling failures. It is understood more than 80 per cent of signals are still mechanical, making the rail network highly susceptible to human error.

An accident in September 2016 claimed the lives of five people and injured more than 30, when three carriages of a train heading from Cairo to Aswan derailed before flipping over.