A consortium comprising Orascom Construction, Siemens Mobility and Arab Contractors won a $4.5 billion contract for the country’s first high-speed railway line that will connect Egypt's Red Sea coast to the Mediterranean.
The companies signed the deal with the North African country's National Authority for Tunnels, or Nat, and will design, install, commission and maintain the rail system for 15 years, Orascom said on Wednesday.
The scope of work includes the installation of signalling and overhead catenary, a telecoms system and traction substations that will provide power to the 660-kilometre-long electrified main and freight rail lines.
Once completed, the project will connect the port cities of Ain Sokhna on the Red Sea to Alexandria and Marsa Matruh on the Mediterranean coast.
“The consortium will directly create more than 15,000 jobs in Egypt, with an additional 3,800 at Egyptian suppliers and indirectly through the wider Egyptian economy via this line alone,” Orascom said.
The project is being executed on an “EPC [engineering, procurement, and construction] plus finance basis” whereby the consortium will help in structuring and arranging the financing on behalf of the client, the company said.
The financial close on the high-speed train project that will transport more than 30 million people a year is expected in 2022.
Nat and the consortium also agreed to discuss and finalise deals on two other high-speed railway lines connecting the Greater Cairo region – the first linking the 6th of October City along the Nile with Aswan and the second connecting Luxor to Safaga, the company said.
Orascom, which is listed on the Egyptian Exchange and the Nasdaq Dubai, reported a 143 per cent increase in its second-quarter income as revenue and new orders grew despite coronavirus-induced headwinds.
Net profit attributable to owners of the company for the three months to the end of June rose to $23.8 million while venue increased 9.7 per cent to $868.3m.
“This high-speed train will strengthen the infrastructure of the areas it passes through and help achieve urban sprawl, in addition to linking the new administrative capital and new cities to the railway network for transporting passengers and goods,” said Egypt's transport minister Kamel El-Wazir.
“The project will also help promote tourism through a fast, modern, and safe means of transportation characterised by the highest levels of efficiency and safety to meet the needs and expectations of all Egyptians across the country, which is considered a major leap in the field of rail transport.”
Siemens Mobility’s share in the total contract is about $3bn, the company said in a separate statement.
The Egyptian government is investing heavily to build an 1,800km high-speed rail network to transport people and goods across the country and reboot its infrastructure sector.
Egypt was one of the few emerging market countries that experienced a positive growth rate in 2020, according to the International Monetary Fund.
It expects real gross domestic product growth to increase by 5.2 per cent in the 2021-2022 fiscal year, up from 2.8 per cent in the previous fiscal year.