Issue 20 - January 2008

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No privatisation for Egypt’s railways

Egyptian Railways will not be privatised, said Prime Minister Ahmed Nazif, speaking on behalf of President Hosni Mubarak at the second Cairo Investment Forum in December 2007, according to Al-Ahram Weekly.

The Egyptian government had approved investments of US$ 860 million to upgrade the national railway network. Back in 2006, Gulf Finance House (GFH) and other financial institutions signed key agreements with the Egyptian government to set up a holding company with an authorised capital of US$1 billion. This first partnership between the public and private sector in Egypt is aimed at developing projects in transportation infrastructure.

(Sources: Al-Ahram Weekly, http://weekly.ahram.org.eg/; Gulf Finance House, http://www.gfhouse.com/)

Bond issues from Transnet

Raising money in the capital market is part of a new plan by the South African state-owned Transnet to finance its port and rail upgrade programme. Reuters UK quoted a senior company official as saying that it will likely issue more bonds this year.

Transnet had already issued in 2007 two bonds for R2.5 billion (US$358 million), which proved to be oversubscribed in the domestic debt market. Money is to be used to partly fund, among other things, the acquisition of over 400 new locomotives.

(Source: Reuters UK, http://uk.reuters.com/)

Rehabilitation of railways in Tanzania

Tanzania Railways Ltd (TRL) managing director Narsimhaswami Jayaram told the East African Business Week (published in Nairobi) that the northern section of its 2,700 km network is to be rehabilitated and new rolling stock introduced. The metre-gauge track, described as being in very poor condition and in need of major overhaul, is part of a transport corridor recently initiated by the East African Community extending from Tanga via Arusha to Musoma on Lake Victoria and thence by ferry to Uganda.

TRL invited bids for reviving/operating the quarry at Tabora in central Tanzania that will provide stones for track repair. This is part of the International Finance Corporation (IFC)’s US$44 million funded rail rehabilitation scheme, which also covers other railway related projects.

The World Bank has recently granted a US$33 million loan for the rehabilitation of infrastructure and rolling stock.

(Source: East African Business Week, http://www.busiweek.com/)

New Philippine line

China National Machinery and Equipment Corporation (CNMEC) was appointed to build North Rail Project, designed to provide efficient rail transport services between Metro Manila, and the Central and Northern Luzon. The 32.2 kilometre project is expected to be completed by 2010, according to Railways Africa. The Chinese government will grant US$421 million through the Export-Import Bank of China, whilst the Philippine government will provide US$82 million towards the total cost of the project.

(Source: Railways Africa, http://railwaysafrica.com/)

ŽSR on track to modernisation

The state railway company in Slovakia, Železnice Slovenskej Republiky (ŽSR), signed a contract with Reming Consult, as part of the plan to modernise the Zilina - Kosice railway track. The project is financed from the EU Cohesion Fund within the Transport for 2007 - 2013 Operational Programme.

The government has earmarked important funds to put the country in line with EU regulations. T he Slovak section of the fifth European Railway Corridor is 545 kilometres long, running from Bratislava to Čierna nad Tisou on the Ukrainian border, via Žilina and Košice, and more than 80 kilometres of tracks have already been adjusted for the 160km/h speed.

(Sources: New Europe, http://www.neurope.eu/; Railway Market, http://www.railway-market.pl/)

Railion Scandinavia

Following an intensive cooperation that started in 2006, Railion, the rail freight operator of Deutsche Bahn AG, and the Swedish rail freight company Green Cargo founded a joint rail production company, named Railion Scandinavia A/S. The aim is to provide competitive rail freight services between Scandinavia and Central Europe as well as seamless cross-border services by establishing a joint locomotive fleet.

Railion Scandinavia A/S will operate single wagon transport services with high frequencies between the hubs of Malmö (Sweden) and Hamburg-Maschen (Germany), and will have operational responsibility for rail freight services to, from and within Denmark.

(Source: Deutsche Bahn AG, http://www.db.de/site/bahn/)

Independent freight operator in France

Voies Ferrées Locales et Industrielles (VFLI), former industrial railway subsidiary of the French state railway operator SNCF, has become an independent railway company that will compete with private enterprises in the rail freight market. VFLI will act primarily as a global service provider in the national railway market, but scheduled cross-border services may also become part of the portfolio.

Fret SNCF, which provides rail freight services as part of the SNCF’s Freight Division, is the second largest rail operator in Europe.

(Source: SNCF, http://www.sncf.com)

Railways in UAE

The government of the United Arab Emirates is planning to ease road congestion by creating a 350 km national railway network for passengers and cargo. A consortium of German rail companies is advising the federal government on the US$2.5 billion project, which could start this year. According to Gulf News, the railway will link Abu Dhabi to the east coast, and be eventually part of the proposed 700 km Gulf Cooperation Council (GCC) wide railway network.

The unified rail transport system is proposed to achieve greater economic and social integration among Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. Saudi Arabia and Kuwait have large rail projects that will be connected to the GCC system. Later Turkey, Jordan, Syria and Iraq may also get connected with the network.

French train manufacturer Alstom is reported to be one of the companies which expressed their interest in the Gulf projects. Japan's Mitsubishi Heavy Industries is leading a consortium that is currently building the US$4.23 billion urban rail network in Dubai, expected to be completed by 2010.

(Source: Gulf News, http://www.gulfnews.com/)

If you have any feedback, please contact Gabriel Craciun, ITF Senior Researcher (railinfo@itf.org.uk)

Related documents:
Railway News Issue 20 - January 2008 (58kb PDF)

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