General Electric to invest in Egyptian railway
General Electric plans to invest hundreds of millions into Egypt’s transportation sector, as the country looks to rebound to its pre-Arab Spring economy.
GE signed a letter of intent with Egypt’s transportation ministry and the Egyptian National Railways (ENR) to supply 100 locomotives for both passengers or freight rail. The deal, valued at US$575 million, will also include a 15-year service for parts and technical support for ENR’s new and old fleet.
“We are working with the transportation ministry and ENR on the entire process – from ensuring a competitive financing solution with partners to the manufacture and technical support for the locomotives, and the training and development of engineers,” said John Rice, vice chairman of GE.
The agreement marks the largest investment that the American firm has committed to Egypt, and will train more than 275 ENR engineers and employees on the 12-cylinder, 3,200 horsepower Light Passenger Evolution Series trains. By upgrading the current infrastructure, Egypt will increase the efficiency in its rail transportation network. “Additionally, the parts and technical support agreement will ensure that the performance of our fleet is maintained over the years,” said Medhat Shousha, chairman of ENR.
Egypt wants to transport 25 million tonnes of goods annually via rail over the next five years, which will also decrease the road traffic, said Hesham Arafat, the minister of transportation. He added: ““This agreement will leverage the role of ENR in transporting goods using rail which is aligned to the ministry’s vision to improve rail infrastructure.”
The ministry said in March that Egypt was targeting up to €14.4 billion (Dh59.17bn) worth of investment in new rail and metro projects, including an €82m passenger and freight line from Mansoura to Damietta and an €85m freight line connecting Egypt’s largest phosphate mine at Abu Tartur to Safaga port.
Egypt’s economy has struggled since 2011 with the removal of long-term president, Hosni Mubarak. According to the World Bank’s development indicators, the North African country’s rail system dropped nearly 60 per cent to 1,592 million tonnes (MT) per kilometre in 2014 compared to 3,840MT per kilometre in 2010.
“Our goal is to work as closely as possible with international corporations to create investment opportunities that meet the country’s needs and are reciprocal in nature,” said investment minister Sahar Nasr, adding that this partnership will help to drive future investments across multiple sectors.
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Updated: June 18, 2017 04:00 AM