Egypt approves law enabling private sector involvement in railways

The House of Representatives of Egypt approved the amendments to the 1980 Railway Act on establishing the Egyptian Railway Authority (ERA) which will allow private sector to operate, manage, develop and maintain railway network and equipment. The amendments stipulate that those franchised shall be chosen within a framework of competition and the franchise period shall not exceed 15 years.
The rules and procedures also state that the prime minister must grant the franchise approval and specify the terms and conditions of the agreement and share it with the government, which needs to approve it. Those franchised must maintain the facilities in place and make them usable throughout the franchise period, and all the facilities shall be transferred to the state at the end of the franchise period free of charge and in good working condition.
The authorities will determine the ways of technical and financial supervision and follow-up to ensure the smooth and regular operation of the facility in question.
The amendments aim to rescue the vital railways sector that suffers from massive debt and outdated operation systems through allowing private investment to modernise the sector and get rid of its massive debts. At the beginning of 2018, the Ministry of Transport announced that the Egyptian Railway Authority accumulated a debt of USD 2.3 billion.
In February, the Government started to study a proposal to allow the private sector to manage underutilized state assets and projects, especially those reporting losses. Then, the Prime Minister said that the state is establishing a sovereign fund to manage these state assets and projects, proposing plans to develop the assets and projects by restructuring them and partnering with the private sector.


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