Egypt has signed a $656 million deal with Hyundai Rotem to upgrade Cairo’s Metro and help localise the industry, the Egyptian Ministry of Transportation said on Wednesday.
The South Korean company will manufacture and supply 320 cars and 40 trains for the city’s second and third metro lines in the agreement signed with Egypt’s National Authority for Tunnels.
The deal will help localise Egypt’s rolling stock industry through Hyundai Rotem’s alliance with the National Egyptian Railways Industries Company (Neric), a joint venture between the government and the private sector.
At least 30 per cent of the production will be local, Minister of Transport Kamel El Wazir said following the contract signing ceremony, which took place at the government headquarters in the coastal city of New Alamein.
“The contract represents the first step in realising the dream of Egypt becoming one of the major industrial countries in this field. It aims to transfer advanced technology in this industry and open new horizons to increase national income through exporting to various countries,” he said.
Prime Minister Mostafa Madbouly said it is “an important step in implementing the president’s directives to localise heavy industries in Egypt, according to the latest methods in line with international standards”.
Egypt had signed a memorandum of understanding with Hyundai Rotem, part of the Hyundai Group, in April 2021 to localise the train industry and transfer South Korean technology.
Hyundai Rotem's chief executive Yong-Bae Lee said at the time the company would be opening factories in Egypt to manufacture metro cars, signalling systems and control and driving equipment.
Founded in 1977, Hyundai Rotem manufactures rolling stock, defence products and plant equipment, and has supplied various types of railway vehicles to 38 countries, according to its website.
The company supplied 20 air-conditioned trains for Cairo Metro's line one, six trains for the second line and 22 out of 32 total trains for the third line. A number of trains will be added this year in collaboration with Spanish company SEMAF, the transport ministry said.
The current contract for 320 new air-conditioned trains, which includes eight years’ maintenance, comes within the framework of expanding the fleet to accommodate the increase in transport volumes.
Upon completion, the two metro lines will transport about three million passengers per day.
South Korea’s Minister of Land, Infrastructure and Transport Won Hee-Ryong praised the agreement in a video message, stating that it is a symbol of friendly relations and mutual trust between the two countries.
“I look forward to Hyundai Rotem making significant contributions to creating job opportunities, promoting the localisation process and developing the railway industry in Egypt,” he said.
Separately, the transport ministry said a co-operation protocol between the Egyptian National Railways, Spanish train manufacturer Talgo and Neric had been signed to study the establishment of an Egyptian factory to produce railway passenger cars.
The protocol would include the local manufacturing of 1,000 railway cars using Talgo technology.
Egypt has been working to modernise its Metro and railway system to support economic growth and urban expansion.
Planned megaprojects include a multibillion dollar high-speed railway line connecting the Red Sea and Mediterranean coasts to be built by Siemens Mobility, Orascom Construction and Arab Contractors, and a monorail linking the New Administrative Capital with Greater Cairo.
In November, Egypt signed a €876m ($868.4m) contract with Alstom for 55 nine-car trains for Cairo’s metro line one. The city’s oldest metro line, started in 1987, moves approximately 2.5 million passengers per day.
