Siemens closes in on deals for Egypt’s high-speed railway

Siemens Mobility expects to finalise agreements for the second and third line of Egypt’s $4.45 billion high-speed electric rail system by the end of this year after financial closing, according to the company’s chief executive for the Middle East and Africa.

The project is already generating a “high level of interest” from other countries in the region and the German contractor is in ongoing discussions with Egypt’s National Authority for Tunnels and the Ministry of Transport on the two lines, Leon Soulier, Siemens Mobility’s chief executive for the Middle East and Africa, told The National at the Middle East Rail exhibition in Dubai. Siemens is awaiting the go-ahead from the Egyptian Cabinet.

“The idea is that we would still close both contracts within this calendar year, subject to financial close, because not only are we doing the construction, supply and maintenance, we are also providing a financing package,” Mr Soulier said.

“What we need is the Egyptian Cabinet’s approval for the Ministry of Transport to be mandated to sign the further lines and this is the important step that remains to be done. We’re bringing the financing, but in the end the financing has to be repaid, just subject to Cabinet approval. ”

Last month, a consortium comprising Orascom Construction, Siemens Mobility and Arab Contractors won the multibillion-dollar contract for Egypt’s first high-speed railway line that will connect the country’s Red Sea and Mediterranean coasts.

The deal covered the initial 660-kilometre line out of the total 1,800km of rail network planned. Siemens, which dubbed the project a “Suez Canal on tracks”, will receive a share of $3bn out of the total $4.45bn contract value.

The company plans to deliver the first of its high-speed trains, which will be adapted for Egypt’s climate, in two years, Mr Soulier said.

The 660km line is designed to carry up to 30 million people per year, saving up to 50 per cent travel time and cutting carbon emissions by 70 per cent, compared with the current use of cars and buses.

The Arab world’s most populous country is undertaking the project as part of wider plans to upgrade its overcrowded transport network, protect the environment, create jobs and develop its economy.

The project financing will be based on engineering, procurement and construction plus financing basis. The consortium will help to structure and arrange the financing.

Siemens “has engaged with banks and financial institutions to see if they can provide loans for this project, but this is from the banks directly to the Egyptian government, the Ministry of Finance and the central bank”, Mr Soulier said.

“We have facilitated those discussions and this is still ongoing.”