Minister of Transportation Hesham Arafat said his ministry seeks to cooperate with the private sector to develop railways. “We welcome the participation of the private sector to accomplish the task,” he said.
During a seminar organised by the American Chamber of Commerce in Egypt, Arafat added that the Ministry of Transportation has already received a number of offers from investors to develop the Abu Tartour-Safaga Railway.
The minister said that a protocol was signed with a private company to transport containers from the 6th of October City to Alexandria, Damietta, and Ain Sokhna ports.
Despite the recent rise in metro ticket prices, the number of metro users increased by 10%, said Arafat. Hence, there is an urgent need to improve the metro’s services to absorb the growing number of users.
The minister announced that another increase in metro tickets will be applied in 2018 or 2019 after the end of the development process.
Arafat believes Egypt’s location can work in favour of the development of the national economy, noting that the transport sector’s contribution to the GDP reached only 3% in the fiscal year (FY) of 2014/2015. Therefore, the ministry seeks to develop integrated road networks nationwide.
In this context, Arafat announced plans to establish new roads with 2,200km to link the entire country, with investments worth EGP 30bn until 2030.
He also announced the ministry’s intention to develop 500km of existing roads with investments of EGP 10bn, in addition to 15 new corridors above the Nile with investments of EGP 12.5bn during the same period.
“The development of metro services became urgent to absorb the expected pressure on the facility due to the recent cut of energy subsidies,” Arafat said.
Since the 30 June Uprising, the Egyptian government has cut the value of energy subsidies frequently, particularly gasoline and diesel.
In regard with the river transport, the minister said he encourages the private sector to contribute to establishing a number of Nile routes, such as Cairo-Alexandria, Cairo-Damietta, Cairo-Aswan, and Cairo-Talkha.
Arafat said that the ministry intends to finance the expansion and development of road networks and railways through obtaining loans from international finance institutions such as the European Bank for Reconstruction and Development (EBRD), the World Bank, and the Kuwait Development Fund. In addition, the ministry can issue bonds or through private equity.
“The participation of the private sector in financing the road projects is necessary,” said the minister, pointing out that the development of each kilometer of roads costs EGP 20m, while the construction of each kilometre of railway costs $7.5m.