Egypt’s Railway Authority is working out the final touches on what would be its largest annual budget ever, estimated to reach EGP 12.8bn, which it plans to spend on developing and renewing a worn-out network.
The budget is a huge surge from the EGP 5.9bn allocated for the authority in the fiscal year ending in June. Head of the Authority Ahmed Hamed told Daily News Egypt that talks are ongoing to secure the financing of the one-year investments.
“We are in talks with foreign institutions to finance at least EGP 1.4bn of the budget,” Hamed said, naming the European Bank for Reconstruction and Development (EBRD), the Hungarian government, and Chinese institutions among those pursued for financing.
“Ongoing talks with the EBRD are over €26m, while those with Hungary involve providing 700 carriages, along with other contributions,” Hamed said.
China Railway Construction Corporation Ltd. announced earlier this month that it signed an agreement worth $600m with the Egyptian National Railway Company to renew the country’s national railway network.
According to reports, the authority will be seeking a backup of EGP 7.3bn from the Finance Ministry, in addition to an EGP 2.5bn loan from the National Investment Bank, despite the Finance Ministry’s decision to end its support to the authority starting from the current fiscal year.
“The authority is supposed to be an investment, money-making one, and it was planned that it breaks even in 2008/2009. However, dilapidated trains, ramshackled stations and facilities made this unachievable,” Hamed said.
The authority has accumulated millions of dollars in losses over the past years, especially during periods of unrest, which grounded many trains amid sit-ins, protests and violence.
This has changed recently, with profits being posted. The Central Agency for Public Mobilization and Statistics (CAPMAS) said the authority made EGP 99.4m in revenues, which compares to EGP 54.1m in the same month the year before.