Egypt: Will the private sector put trains back on track?

Two years ago, a train accident that killed 25 people after a locomotive slammed into a barrier at the capital’s main Ramses railway station, was thought to be the breaking point for Egypt. What followed was upheaval in the sector and a light shed on the country’s ageing railways.

But the government’s persistent efforts since then appear to be anything but adequate to reduce the number deadly train crashes that have made headlines in recent months.

It is not entirely clear how efforts to upgrade the system will play out. But involving the private sector is on the cards, a move that observers are ambivalent about, with doubters arguing the current railway development endeavour is likely doomed to failure, like previous initiatives.

Big spending

The notorious accident in February 2019, which saw victims set on fire on the platform – as shown in surveillance camera footage – sent shockwaves across the country. That in turn triggered a spending spree under the leadership of a new minister.

Former military general Kamel Al-Wazir was installed as transport minister one month after the accident, which had prompted his predecessor to tender his resignation amid public outrage.

His appointment was followed by billions of US dollars worth of deals to purchase new trains, some bought from the US, Russia and Spain. The government also spent billions more to develop the crumbling railway infrastructure that is often cited as a reason for the crashes.

Human factor

But recent train accidents in different parts of the country have seen Al-Wazir more than once take a swipe at railway workers – whom he blames for holding back developmental efforts.

In April of this year, shortly after a train derailment that killed 11 people north of Cairo, the minister accused some workers of being drug users and others of deliberately sabotaging railway facilities to provoke accidents.

The latter, he said, included workers loyal to the Muslim Brotherhood, which late Islamist president Mohamed Morsi once led and has since been banned. The government has persecuted its leaders and members since Morsi’s 2013 toppling.

 ‘Revolution’

Egypt’s railways “need a revolution in terms of restructuring and training,” Hassan Madhy, a transportation professor at the engineering faculty of the Cairo-based Ain Shams University, tells The Africa Report.

He argues that the system has some 54,000 excess railway workers, including engineers and technicians, who constitute a financial burden.

History has shown us that this industry is particular, so it requires heavy investments and its financial cycle is slow.

Mahdy says the Egyptian National Railways’ (ENR) yearly salary budget is overinflated, standing at £E3.5bn ($223m) despite its below-par performance and a great deal of red tape that may hamper possible reforms. The authority’s debt exceeded £E70bn in 2020.

Transportation and logistics expert Hamdy Barghout also says that training needs to be improved, yet he mostly blames management for its lack of strategic planning.

The transport minister “spends more on steel than on humans,” who in turn feel any renovations done have little impact on workers, Barghout tells The Africa Report. “They have no reward or motivation,” adding that all levels of the railway hierarchy are to various degrees responsible for accidents.

Private sector

In June, right after a train collision in the Mediterranean city of Alexandria, Al-Wazir placed the blame on workers in another searing indictment, stating how their underperformance could push him to hire foreign companies to manage the railways.

Mahdy says this could offer a reasonable alternative, whether the companies are local or international, citing Egypt’s deal with RATP Dev, a subsidiary of France’s RATP Group, that was signed in September 2020 to operate and maintain Line 3 of the Cairo Metro for 15 years.

But economy writer and researcher Wael Gamal insists that such a move will be no remedy.

“History has shown us that this industry is particular, so it requires heavy investments and its financial cycle is slow,” he tells The Africa Report. “Usually when the private sector secures the right to manage and operate [railways], it would refrain from putting forward such heavy investments,” he adds. Such investments include work needed to renovate, expand and maintain the railway network.

‘No guarantees’

Resorting to public-private partnerships (PPPs) is often a result of “the inability of the government to invest,” says Gamal. But in doing PPP deals, the state ends up shouldering the required investments, he adds, citing similar experiences elsewhere, such as in Germany and the UK.

• In May this year, the UK revealed a plan to bring the national rail network back under government control, putting an end to railway PPPs agreed upon in the 1980s and 1990s.
• In recent years, rail services run by private companies in the UK were marred by a multitude of problems, including high prices and train shortages and delays.

“There are no guarantees whatsoever,” when the private sector steps in, even in “more developed countries where governance is better [than in Egypt],” Gamal says.

Legal amendments made in 2018 allow private companies to be involved in managing, operating and maintaining railway services.

History repeats itself?

Over the past decade, the Egyptian railways, the oldest in Africa and the Middle East, recorded more than 1,000 train accidents every year – with 2,044 in 2018 alone, according to official data.

There were also recurring train accidents in the 1990s and early 2000s, the most infamous being in 2002 when a train heading from Cairo to Luxor during the Eid Al-Adha holiday, caught fire. More than 370 passengers died, mostly after either jumping out of the moving train or being burnt alive.

Previous attempts to renovate the railway network, which extends around 10,000km across the North African country, are similar to today’s efforts:

• purchasing new locomotives and fixing old ones;
• developing level crossings;
• seeking partnerships with private companies.

Gamal says the current renovation efforts are not drastically different from previous ones, yet the private sector’s involvement will likely be deeper this time around.

For his part, Barghout says the lack of vision and poor crisis management, resulting in further deterioration, has been a common factor in railway renovations over the years. “There will be a lot more accidents” if management remains the same, he warns.

Measures and goals

But what can be done now to remedy the poor efforts from before?

Mahdy says there are steps that need to be taken to reduce the probability of train accidents, such as decreasing speed limits and shutting lines that are not busy. Such steps could also pave the way for more efficient renovation works, which are a lot more difficult to pull off when the railways are working at full capacity, he adds.

Meanwhile, Gamal stresses the government should not see the railways as a profit-making scheme.

“When I set a meager transportation fare, I would for instance enable an individual to commute from his village to a small city to work there,” he says. “Others will have the opportunity to learn at a better university,” and such beneficiaries will collectively help the economy.

Bottom line

Egypt has been spending heavily over the past two years to develop its problematic railways. But despite those efforts, train crashes keep taking place. Involvement of the private sector in managing and operating trains could put trains back on track, but that move has not always paid off in other countries.