EXCLUSIVE: Egypt fears PPPs could increase transport costs

18 June 2018
EPC plus finance model preferred for Egypt's upcoming rail schemes

Egypt may favour a hybrid engineering, procurement and construction plus finance (EPC+F) model for its planned infrastructure projects to minimise or avoid further increases in railway ticket prices.

“We cannot risk to further increase ticket prices in Egypt,” a senior official at a global firm operating in Egypt tells MEED, adding that public private partnerships (PPPs) could trigger hikes in Egypt’s rail ticket prices.

“The public does not have to pay more… we need to improve the services first, then maybe at some point [in the future] we can privatise the [rail] operations.”

The planned electric high-speed passenger and freight rail linking Ain Sokhna on the Red Sea coast and the new Alamein city on the Mediterranean coast, as well as two monorail systems linking Cairo’s Nasr District to the New Cairo Capital, and Giza to 6 October City, are expected to utilise the EPC+F model.

The source went on to explain that the expansion and modernisation of Egypt’s transport infrastructure is imperative given the safety threats the current infrastructure poses to commuters.

“[Authorities] have been moving faster compared to the past,” the source tells MEED, referring to major government stakeholders including the  Ministry of Housing, Utilities & Urban Communities, Transport Ministry and Egyptian National Railways (ENR). “I am optimistic these projects will enter the execution phase soon. Egypt has enough local and international contractors and people to work on these projects.”

In addition to the high-speed rail and monorail projects, there are plans to electrify additional segments of Egypt's 9,600-kilometre mainline railway network.

Electrification of four segments of railway is already under way, with work on these World Bank-funded schemes expected to be completed in or before 2020.

In addition to the expansion and rehabilitation of Egypt’s long-distance railway network, work is under way on the third phase of Cairo Metro’s Line 3. The main civil works contract for the first phase of the metro’s Line 4 is also expected to be awarded soon.

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