EGYPT: The National Authority for Tunnels has formally awarded a joint venture of Hyundai Rotem and National Egyptian Railway Industries Co a US$563·2m contract to supply 40 trainsets totalling 320 cars to increase capacity on Cairo metro lines 2 and 3.
The trains are to be delivered by 2028, and the contract signed on August 24 includes a two-year warranty and eight years of maintenance by the manufacturer.
Hyundai Rotem has an 86% share of the contract value, with the remaining 14% going to local partner NERIC, a public-private joint venture of the Egyptian Sovereign Fund, Suez Canal Economic Zone Authority, Samcrete Investments, Orascom Construction, Hassan Allam Holding, Connect Professional Services and East Port Said Development Co.
The deal includes technology transfer to support local manufacturing by NERIC at East Port Said in the Suez Canal Economic Zone, with NAT saying there is target localisation rate of at least 30% in the project.
This supports Egypt’s ambitions for local manufacturing to meet its domestic rolling stock needs, which would reduce imports and provide job opportunities for young people.
Minister of Transport Kamel Al Wazir said the agreement was also the first step in realising the dream of Egypt becoming a significant rolling stock supplier to the world, and especially across Africa.
South Korea sees opportunities
Hyundai Rotem said the South Korean government had identified Egypt as a market that has good potential for growth, with its ongoing railway modernisation as well as high speed, urban and metro projects in development. The Cairo order would create opportunities for around 100 South Korean SMEs.
The company said the South Korea government played a decisive role in winning the contract by offering a financing package in response to other countries providing similar arrangements for their domestic suppliers involved in international competitive bidding.
The Ministry of Economy & Finance and Export-Import Bank of Korea are providing US$560m of financing, including a US$460m loan from the Economic Development Co-operation Fund, the largest it has provided, and US$100m in export finance.