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The Egyptian government recently announced that it would dedicate $1.48bn to improve rail services, the largest ever overhaul of the country's extensive rail network. Foreign firms are lining up to bid on a series of lucrative contracts that will come through the initiative.

The move, in part, was sparked by yet another fatal train crash, a two-train collision in Qalyoub that claimed the lives of 58 people in August. The accident also cost the head of Egyptian National Railways (ENR) his job and saw 14 staff charged with negligence.

According to Egyptian Transport Minister Mohamed Mansour, the country's rail network is in dire need of massive investment to ensure safety, efficiency and restore the loss maker to profitability or something close to it.

It will be a major task, with little of the country's 5000km of track electrified, most of the signalling system not automated and much of ENR's rolling stock either aged or actually out of commission. It is a testimony to the authority's staff that, despite its failings, it managed to carry 800m passengers last year and that most of its services arrived on time.

The shopping list for ENR is a long one, with new engines, carriages, signalling systems and safety equipment all being sought, and most will be produced overseas.

During an official visit to China in October, Mansour held meetings with representatives of five firms in the rail sector, holding talks with producers of locomotives, carriages and control systems.

So keen were the Chinese companies to woo the minister that many of the offers came in at half the price of comparative Western equipment, with an additional proposal that Egypt could take advantage of a rent to own scheme of financing, paying a monthly rental for locomotives based on distance travelled.

India too is also keen on getting on board the Egyptian rail renaissance, On December 4, it was announced that Egypt was to install an anti-collision device (ACD) designed in India on 500km of line. The announcement came after a team of experts from Kernex Microsystems India Ltd and Konkan Railway had carried out a survey of Egypt's rail network to determine if the ACD system could be adapted for use on the ENR's system.

However, while new rolling stock and infrastructure are to be acquired, much of the funding is to be directed towards renovating existing equipment. Of the 700 locomotives on its books, ENR says just 400 are in working order.
The picture painted by the parliamentary transport committee is even bleaker, with a recent report saying just 260 of the authority's engines are operational.

Mansour has said that ENR's workshops will be given a complete overhaul, bringing them up to modern standards, allowing for a faster turn around on repairs.

Studies have shown that breakdowns in ENR's signalling network has contributed to a number of accidents, an issue flagged by Hamdy El-Tahhan, head of the parliament's transport committee.

This ancient system was designed to serve the network when the intervals between trains were 30 minutes, but with the current intensity of the traffic - where intervals between trains are only five minutes - it is totally inefficient, he said in an interview with a business journal in November.

While promising not to hit passengers with higher ticket prices, Mansour does want to see ENR boost its revenues. Having lost $280m for each of the past five years, the minister sees increasing the levels of freight carried on the network as the way forward. Given that ENR transports just 5% of all cargoes carried in Egypt at present, this shouldn't be too hard to achieve.

Though the minister has ruled out a full privatisation of the network, he is a supporter of joint state-private investment projects. Under Egyptian law, assets such as the rail system cannot be sold off. However, recent amendments to legislation allow for private investment in new developments, with the first of these being signed in mid-September.

The Egyptian Holding Company for Transport, founded by the ministry of transport, Abu Dhabi Investment House and the National Holding Company of the UAE and Bahrain's Gulf Finance House announced on September 11 it was to carry out studies into the feasibility of building lines connecting Hurghada to Luxor and Borg El Arab to Alexandria. The scheme, if it comes to fruition, would be part of a five-year plan to invest up to $30bn in highway, railroad and port construction projects.