Egypt plans to build $10b high speed rail through IPO

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Egypt plans to build $10b high speed rail through IPO

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According to local sources, Egypt ministry of transportation has announced plans for an initial public offering (IPO) to finance the construction of a high-speed rail project.

The high speed rail project, with a total investment estimated at EGP70 billion (US$10 billion), is planned to be developed in three phases and it would connect Alexandria and Aswan passing through Cairo, Assiut and Luxor.

New regulation that allows new projects to launch IPO would allow this financing tool not very common for the financing of greenfield projects in other countries.

The project is intended to be funded also through contributions from military and government banks along with the IPO.

The first phase involves  a Cairo-Alexandria line that accommodates 10 to 18 million passengers a year and a 5-year execution period. This first section is expected to be operational in 2017.

The second phase involves a Cairo-Luxor line that accommodates 25 to 30 million passengers a year and a 8-year execution period and the third phase involves a Luxor-Aswan line that accommodates 25 to 30 million passengers a year and a 5-year execution period.

A second railway project has been announced by the ministry of transportation. The railway would link the residential and industrial area of the 10th of Ramadan City to Cairo's Ain Shams. The project cost is estimated at US$700 million.

The third rail project announced was the Luxor-Hurghada railway line that originates in Luxor City and reaches Qena-Safaga.

The transportation ministry is proposing a list of 28 projects among which the following are also included:

  • Safaga-El Quseir-Marsa Alam road with an $85 million cost,
  • a $71 million Ras Sudr-Sharm Al-Sheikh road,
  • a $640 million road that extends from Alex in the north west of the Nile to Abu Simbel in the South,
  • seven logistics villages and dry ports,
  • logistics centre in 6th of October City with an estimated cost of $100 million,
  • Heliopolis tram line and extending it to New Cairo with a cost of $435 million (IFC working on a pre-feasibility study),
  • Fifth metro line, "Nasr City - Heliopolis - Rod El-Farag", which encompasses 17 underground stations, and a sixth metro line connecting El Khosous City near the Ring Road to New Maadi, which will include 24 stations, and
  • Port Said Tunnels project with the aim of providing services to the industrial region on the east coast of the Suez Canal

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