A New Future of Localizing Industrialization of Railway in Egypt

NERIC participated in the fifth session of the Intelligent Transport, Logistics and Green Transport Exhibition and Conference for the Middle East and Africa TransMEA 2023, which was held during the period 5 - 8 November 2023 under the patronage of the Egyptian President.

During this exhibition, the following agreements were signed:

First agreement

A framework agreement to invest in, manufacturing Autonomous-rail Rapid Transit (ART) and potentially selling the same product inside and outside of Egypt between NERIC, represented by Mr. Ahmed Al-Mufti, Project Manager, Hunan CRRC Intelligent Transport Technology Company, represented by Mr. Bingquan Xiao, Deputy General Manager, and Zhuzhou CRRC Times Electric Company, represented by Mr. Zhongtian Xu, Deputy Director. General Manager of the International Business Unit and NORINCO International Cooperation, represented by Mr. Chunhu Wang, Regional Director.

Second agreement

A framework agreement for cooperation in technology transfer, local manufacturing, supply, and maintenance of the Ganz Trailer Bogie type with an operating speed of 160 km/h was concluded between NERIC, represented by Mr. Ahmed Al-Mufti, Project Manager, Ganz Motor Kft, represented by Ms. Beata Balogh, Deputy Commercial Director, and Tahawy Company. Rail DWC LLC (Ganz agent) – represented by Dr. Amr El Tahawy, CEO.

In addition, NERIC participated in holding a conference on “Localization of the railway wagon industry in Egypt” during the exhibition sponsored by the East Port Said Main Development Company, the industrial developer of the East Port Said industrial zone within the Suez Canal Economic Zone, where the NERIC is located, and is looking forward to making this project a nucleus for localizing and deepening local manufacturing and developing value-added chains for the railway vehicle industry in Egypt and the Middle East region.

During the 5th edition of the Smart Transport, Logistics, infrastructure & Traffic Fair & Forum for The MEA Region Exhibition, TransMEA, the Egyptian Minister of Transport, General Kamel El Wazir witnessed the signing of a Head of Terms between NERIC and the Egyptian National Railway for the localization and supply of 500 passenger coaches as an initial phase of a 1000 including 15 years of maintenance. This head of terms was signed by Eng. Mohamed Amer in his capacity as Chairman of ENR and Dr. Ahmed Fikry Abdel Wahab in his capacity as Managing Director of NERIC.
The Minister clarified that NERC would supply and maintain 500 passenger coaches in accordance with technical specifications and quality standards, dividing them as follows: (300 air-conditioned second-class coaches - 150 air-conditioned first-class coaches - 50 air-conditioned buffet coaches). This will be executed in collaboration with one of the international OEMs and will include a 3-year warranty against manufacturing and material defects. The parties agree that the aim of gradually reaching an 80% local value-added rate is of utmost importance.

We are delighted to share that on September 20th, 2023, we had the privilege of hosting an economic delegation from the US Embassy headed by Mr Rajeev Wadhwani, Minister Counselor for Economic Affairs at the Embassy, along with the Embassy's Trade and Investment Officer, Ms Elisabeth Stratton, and Energy and Transportation Officer, Ms Rebecca Hunt, on a visit to NERIC in East Port Said.

 During this visit, we had the chance to brief them about NERIC's vision, objectives of know-how transfer and localization, and the current status of the facility’s construction as well as the pipeline of current and potential projects.

 It was an engaging discussion that highlighted opportunities and future collaboration possibilities that underscored the importance of international cooperation that can benefit both nations.

We are thrilled to share the recent visit of the Korean Ambassador, Kim Yonghyon, along with the Head of the Economic Section, Sanghun Oh, to the construction site of NERIC's facility in East Port Said on August 19, 2023.

The consortium created between NERIC and the Korean OEM Hyundai Rotem company will supply the National Authority for Tunnels with 40 trains for Cairo Metro Lines 2 and 3 which will be produced at this facility.

During their insightful tour, Ambassador Kim Yonghyon and Head of the Economic Section Sanghun Oh were briefed about the Suez Canal Economic Zone, the Industrial Park developed by East Port Said Development and NERIC's aim and updates. The discussions centred around opportunities for bilateral investments, technology transfer, and knowledge exchange, strongly emphasising sustainable development and mutual growth.

The visit marked an important milestone in fostering international partnerships and economic cooperation between Korea and Egypt. NERIC is a testament to collaboration, providing a platform for advancements in various sectors.

Within the Framework of “Train Track” Programme, GIZ Egypt Signs a Letter of Intent (LOI) with the National Egyptian Railway Industries Company (NERIC) to Support the Railway Sector Technical Graduates

The programme aims to qualify and match around 400 technical education graduates and job seekers with the available employment opportunities in the railway sector.
NERIC is one of the key company partners that supports some of the graduates of the “Train Track” programme offering them specialised training on the job technical training and/or internships, strengthening their personal and technical skills, and therefore, enhancing their employability as well as contributing to the development of the railway sector.

This partnership also supports job creation in #greentransport projects which promote #energy efficiency and contributes directly to a significant reduction of fuel emissions and pollution hazards.

This programme is carried out by GIZ Egypt on behalf of the German Government, through the Project Job Partnerships and SME Promotion, as part of the Invest for Jobs – Special Initiative "Decent Work for a Just Transition".
 

EGYPT’s Ministry of International Cooperation has signed a $US 460m deal with the Korean Economic Development Cooperation Fund (EDCF) to fund the manufacture of rolling stock for Cairo metro lines 2 and 3.

The agreement was signed by the new Korean ambassador to Egypt, Mr Kim Yong-hyon, and Egypt’s minister of international cooperation, Ms Rania Al-Mashat.

In November 2021, Egypt and Korea signed a $US 650m memorandum of understanding (MoU) to localise rolling stock production in Egypt. In August 2022, Egypt’s Authority for Tunnels (NAT) signed a $US 656m deal with Korean manufacturer Hyundai Rotem to locally produce and import 40 eight-car air-conditioned metro trains by 2028, which will be partially funded under the latest agreement.  

Kim, who assumed his post as ambassador on May 31, described the agreement as a prominent example of steps aimed at strengthening development cooperation between the two countries.

He said that the project is expected to be the cornerstone for more cooperation projects between the two countries in the future and will contribute to a tangible improvement in the standard of living of the Egyptian people.

Kim also stated that he will work to increase private-sector cooperation between the two countries during his tenure in Egypt, and therefore communication and cooperation with the Egyptian government and local companies will continue actively.

Burroughs, David. “Egypt and Korea sign $US 460m agreement to fund new Cairo Metro fleet.” IRJ, 14/6/2023, https://www.railjournal.com/passenger/metros/egypt-and-korea-sign-us-460m-agreement-to-fund-new-cairo-metro-fleet/.

Egypt’s National Authority for Tunnels (NAT) has signed a contract with a consortium of companies, including Hyundai Rotem and the National Egyptian Railway Industries Company (NERIC), to manufacture and supply 40 new trains, comprising 320 vehicles, for Cairo metro lines 2 and 3. 

The $US 656m contract includes maintenance for a period of eight years in addition to one major overhaul per train. The local content of the order will be no less than 30%.

Egyptian prime minister, Dr Mostafa Madbouly, witnessed the signing ceremony, which was attended by the minister of planning and economic development, Dr Hala Al-Saeed, minister of transport, lieutenant-general engineer Kamel Al-Wazir, minister of international cooperation, Dr Rania Al-Mashat, and minister of trade and industry, Mr Ahmed Samir.  

The agreement was signed by NAT chairman, major general Sherif Hassan Leil, Hyundai Rotem president and CEO, Mr Young Bai Lee, and NERIC managing director, Dr Ahmed Fikry Abdel Wahab.

Madbouly stressed that signing the contract was an essential step in implementing the policy of President Abdel Fattah El-Sisi to encourage the development of heavy industry in Egypt.

Egypt is increasing the Cairo Metro fleet in order to accommodate the anticipated increase in passenger traffic. Lines 2 and 3, when completed, are forecast to carry around 3 million passengers daily. 

Realizing the dream ... NERIC’s rolling stock production facility under construction.

During the TransMEA 2021 Intelligent Transport Exhibition , the National Authority for Tunnels and ROTEM-NERIC Consortium signed an MOU for Localization and Supply of Forty (40) Metro Train Sets for lines 2 &3. A major step towards industrialization of rolling stock in Egypt.

NERIC is currently establishing a rolling stock manufacture facility at East Port Said Special Economic Zone aiming to deepen and localize the railway industry in Egypt.

Egypt will have its first major rolling stock production plant under an agreement signed in Cairo on Tuesday for the creation of a joint venture with a capital of $240 million.

The General Authority for Suez Canal Economic Zone (SCZone) and the Sovereign Fund of Egypt signed an agreement with several private-sector companies for the establishment of the National Egyptian Railway Industries Co. (NERIC) in East Port Said, a key Egyptian export terminal on the Mediterranean Sea.

Local media, and statements by planning and transport ministry said the private partners comprise Samcrete Investments Holding, Hassan Allam Holding, Orascom Construction, and Connect Information Technology.

Planning and Economic Development Minister Hala Al-Saeed said a refurbishment plant is expected to start operation in the fourth quarter of 2021, while the locomotive factory would begin its operations by the end of 2022.

Investments in the joint venture are expected to reach $10 billion over the coming 10 years, she added.

Transport Minister Kamel Al-Wazir said 40 percent of the components of the rolling stock would be locally produced and that the plant would target both the domestic and foreign markets, adding that it also aims to attract technology and capital by global firms.

He said the factory, spread over 300,000 square metres, would be built in two stages and would have the capacity to produce 300 units per year.

"This is one of the most important industrial projects in Egypt," the Zone's Chairman Yehya Zaki said. "The project is expected to boost the Zone's international rating and create large investment opportunities."

INVESTMENT WATCH- Big new rail company plans to invest USD 10 bn + tons more rail transport news from Cairo ICT: The Suez Canal Economic Zone and the Sovereign Fund of Egypt signed an agreement yesterday to set up the National Egyptian Company for Railroad Industries (NERIC) — the new company specialized in producing and refurbing locomotives — at the Cairo ICT expo Monday, according to a Planning Ministry statement (pdf). The company is expected to invest USD 10 bn over the next few years, Planning Minister Hala El Said said.

Private sector firms look like they’ll hold the majority of the equity in the new company, but the minority stake to be split by the SCZone and SFE will be preferred shares that give them extra voting rights and a claim to a larger percentage of any profits or gains on exits, El Said suggested to Kelma Akhira’s Lamees El Hadidi last night (watch, runtime: 9:09). The minister didn’t specify the extent of the preferred voting rights or the questions on which they might be exercised. The exact ownership breakdown among the private sector firms still isn’t clear but the ministry statement says that Orascom Construction (OC), Samcrete, Hassan Allam Holding and Connect Information Technology will hold stakes, with OC taking a 15% share.

The investments include a EGP 2.2 bn facility that will eventually house three lines: One to upgrade rail engines, one to produce metro cars, and another to produce high-speed, long-distance railcars, Chairman Ahmed Fekry said, according to the local press. The production lines will have a capacity of 150k pieces of rolling stock per year. The planned investment is part of a plan to modernize Egypt’s ailing railway network and kickstart rail exports to other countries in the region, Fekry added.

Other agreements signed at the expo:Setting up a railway signaling control center in the Technical Institute for Rail Technology, under an agreement between the National Railways Authority and the Egyptian arm of French manufacturer Alstom.
The christening of the New Cairo monorail station One Ninety through an agreement between the National Tunnels Authority and Landmark Developments.
An MoU between the General Authority for Land and Dry Ports and a consortium of unnamed American and British companies to conduct a feasibility study for the Sohag Dry Port and logistical zone.
A training and skill transfer agreement between Huawei and Trans IT, which will see the Chinese tech giant provide training to its staff.
Setting up a railway engineering training academy in Cairo with Bombardier Transportation, to train new local engineering graduates.OTHER RAILWAY NEWS: Orascom Construction will spend EUR 2 bn on the construction of the two monorail lines for the new administrative capital and Sixth of October, CEO Osama Bishai said at the expo, according to Al Mal. The project entails a 54-km-long monorail system connecting Nasr City with the new administrative capital, and a 42-km line between Sixth of October and Giza. A consortium made up of Bombardier, Orascom Construction, and Arab Contractors signed a 30-year contract for the construction and maintenance of the lines last year. The two lines are expected to cost more than USD 4.6 bn, USD 3 bn of which will be spent on construction and USD 1.67 bn on operating and maintaining the lines for 30 years.

OC, Mitsubishi sign USD 800 mn contract for civil works on Cairo Metro Line 4: A consortium of Orascom Construction and Japanese conglomerate Mitsubishi signed a USD 800 mn contract with the Transport Ministry for railway works for the first round of Cairo Metro Line 4, OC said in a press release (pdf). The project will be financed through a JPY-denominated loan from the Japan International Cooperation Agency, which we previously noted is funding the first phase of the new metro line. The OC-Mitsubishi consortium signed the agreement during this week’s TransMea 2020 expo, which is currently underway as part of the Cairo ICT conference.

Egypt’s Minister of Planning Hala El-Saeed, and Minister of Transport, Kamel El-Wazir, witnessed on Tuesday the signing of a new contract for establishing the National Egyptian Railway Industries Company (NERIC) between Suez Canal Economic Zone and the Sovereign Fund of Egypt along with several private sector companies.

The Suez Canal Economic Zone and the Sovereign Fund of Egypt signed on Tuesday an agreement to establish new rail company, named the National Egyptian Company for Railroad Industries (NERIC).

The new company will be specialised in localising the production and refurbing of locomotives in Egypt to meet the country’s demand and increase its exports.

It is expected to invest $10 billion over the next few years, said Egypt’s Minister of Planning Hala al-Saeed.

Al-Saeed and Minister of Transport, Kamel El-Wazir witnessed the signing ceremony in East Port Said on the sidelines of the third edition of the Smart Transportation and Logistics Fair and Forum for the Middle East and Africa (Trans MEA 2020).

The agreement was signed with several private sector companies, including Samcrete Investments Holding, Hassan Allam Holding, Orascom Construction, and Connect Information Technology. Orascom will have a 15 percent share in the new company.

One of the new company’s investments will be a 2.2 billion Egyptian pound ($140.2 million) facility that will house three lines. One is designed to upgrade rail engines, the second is to produce metro cars, while the third is to produce high-speed, long-distance railcars, NERIC chairman Ahmed Fekry told reporters.

The production lines will have a capacity of 150,000 pieces of rolling stock per year. The planned investment is part of a plan to modernise Egypt’s ailing railway network and kickstart rail exports to other countries in the region, Fekry said.