Interview: Ayman Khattab
How would you characterise the current condition of Egypt’s rolling stock?
AYMAN KHATTAB: As one of the oldest in the world, Egypt’s railway system has long played a pivotal role in the movement of people and goods across the country. However, it is no secret that rail infrastructure in Egypt needs significant upgrading. As such, the Ministry of Transportation (MoT) and Egyptian National Railways (ENR) have embarked on an ambitious development plan for the sector, which includes strong investments to support the upgrading of ENR’s existing rolling stock. Egypt’s fleet of trains will need to be substantially increased to meet the growing demand for railway services from both passengers and freight activities. It is also vital for the railway sector to bring in more advanced technologies to become faster, more efficient and more reliable.
In that sense, increased efforts are being made, in terms of maintenance and training capabilities, to foster skilled labour and provide more services to the citizenry. To that end, in June 2017 GE signed a deal with the MoT and ENR to bring 100 new multi-use locomotives and rehabilitate GE’s existing locomotives within ENR’s fleet. The deal includes a 15-year, long-term parts agreement, which ensures the maintenance of new and existing locomotives, as well as the training of 275 ENR engineers and technicians, in addition to providing technical advisory.
What steps need to be taken to build up Egypt’s pool of skilled labour in the railway segment?
KHATTAB: One of Egypt’s major strengths is its abundance of skilled labour across all sectors of the economy, with a young population eager to learn and perform. International companies can play a pivotal role in expanding the pool of local skilled labour by leveraging their global experience and bringing it to Egypt. For example, since GE will be providing technical advisory throughout the project’s execution, the company will have the opportunity to transfer knowledge and best practices locally.
What potential is there for the country to expand its role in the manufacturing of rail carriage components and locomotives?
KHATTAB: Egypt definitely has the potential to be a manufacturing hub and to serve the Middle East and Africa, if not the world. The country relies on a wide array of resources, including talent and a strategic location, and it represents a very attractive investment destination for manufacturers from a cost perspective. The government and the private sector have been working hand-in-hand to further tap Egypt’s manufacturing potential and to move up the value chain in many industrial sectors, including transportation equipment. However, Egypt has still to overcome a few lingering challenges, such as bureaucratic delays in the decision-making processes, to see increased foreign and local investment.
How will increased rail usage impact shipping and internal distribution costs?
KHATTAB: The MoT has announced its plan to increase the use of rail to transport goods across the country from 4m tonnes per year to 25m tonnes per year by 2020. The potential for development is huge in this area, especially from a technology perspective, where logistical competitiveness gains can be achieved for both freight and passengers.
Using rail for freight transportation in Egypt presents numerous advantages cost-wise. Developing railways will also have a direct impact on both road congestion and the number of traffic accidents. There will also be cost savings associated with the number of trucks currently used to transport goods. Lastly, and most importantly, by having companies use and depend on railways to move goods across the country, it will translate into significant revenues for ENR.
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