Egypt signs $4.45 billion high-speed electric rail deal with Siemens-led alliance
Egypt has signed on Wednesday a 15-year contract worth $4.45 billion with a consortium led by German industrial group Siemens for a high-speed electric rail line to link its Red Sea and Mediterranean coasts.
Siemens dubbed the project as a “Suez Canal on rails”.
The contract signed between Egypt’s National Authority for Tunnels (NAT) and a consortium including Siemens Mobility, Orascom Construction, and Arab Contractors will cover design, installation and maintenance of the 660-kilometre (410 miles) rail link, a Cabinet statement read.
Essam Wally, chairman of NAT, has signed the contract with Michael Peter. CEO of Siemens Mobility; along with Léon Soulier, CEO of Siemens Mobility Middle East and Africa; Sayed Farouk, CEO of the Arab Contractors; and Osama Bishai, CEO of Orascom Construction.
The signing was witnessed by Egyptian Prime Minister Mostafa Madbouly, Minister of Transport Kamel al-Wazir, and German Ambassador in Cairo Frank Hartmann.
Suez Canal on rails
The rail link will include an electrified main line designed to carry more than 30 million passengers annually as well as a freight line, to run between the Red Sea port of Ain Sokhna and the Mediterranean ports of Alexandria and Marsa Matrouh.
The network will eventually extend to 1,825 kilometres, according to the Cabinet statement.
Ain Sokhna is a strategic port and industrial complex south of the Suez Canal, the quickest sea link between Europe and Asia.
Madbouly emphasised on President Abdel Fattah al-Sisi’s interest in the project, which is considered a momentous leap in Egypt’s transportation system.
He described Siemens, which has implemented major electric power plants in the country in the last several years, as a “successful partner” for Egyptians in different sectors.
The rail link would cut journey times by as much as half, Siemens CEO Roland Busch told journalists via video conference describing it as a “Suez Canal on rails”.
Siemens’ share of the contract is worth around $3 billion. Trains are set to be delivered by its Siemens Mobility unit by the end of 2023, with the order to be completed by 2027, the German group said in a statement.
A game-changer for the region: #Egypt invests in a Suez Canal on tracks. @SiemensMobility is very proud to deliver a sustainable, reliable and modern integrated #rail system which will #transformtheeveryday for millions of Egyptians. #MovingEgypt https://t.co/ClWAxT1YkP pic.twitter.com/CUgLP5p8Uf
— Michael Peter (@michaelmppeter) September 1, 2021
The consortium will execute the project on an EPC + Finance basis whereby the consortium helps structure and arrange financing for the project on behalf of the client, Orascom Construction noted in a statement.
Financial close on the contract is expected within 2022, Orascom added.
Lower carbon emissions
The environmentally sustainable project will “reduce 70 percent lower carbon emissions compared to conventional means.” said Osama Bishai, CEO of Orascom Construction.
NAT also agreed with the consortium to discuss and finalise more deals on two other high-speed rail links in Egypt, the first to run south from Cairo to Aswan, the other to connect the Nile city of Luxor to Hurghada and Safaga on the Red Sea, Orascom added.