Fast track to privatization: Who’s running Egypt’s trains?
State looks to private-public consortia to operate Metro and new rail lines
The Ministry of Transport is negotiating the financial and technical details with an Egyptian-German consortium for operating the country’s new high-speed rail network—Egypt’s most capital-intensive transport infrastructure project to date.
This isn’t the government’s first partnership with the private sector. Five years ago, the ministry signed an agreement with French firm RATP Dev to operate Cairo Metro Line 3. A year later, the same company was contracted to run the light rail line linking the end of the metro line to the New Administrative Capital.
According to two government sources who spoke to Al Manassa, a portfolio of land transport projects is now being offered to private operators. The shift suggests that Egypt’s new generation of major transport initiatives—launched over the past decade—will largely rely on the private sector for both operation and management.
But why is the government outsourcing the operation of its railways? Are these contracts going to foreign companies, or are Egyptian players in the running? And what shadow does it cast on prices paid by commuters?
Public operators fall short
A board member of the National Authority for Tunnels/NAT, speaking on condition of anonymity, said the government is turning to private companies due to the poor performance of its own operator, the Egyptian Company for Metro Management and Operation. The state-owned firm caused substantial financial losses to the public purse, the source said.
“When the metro first began operating in the 1980s, a French company managed Line 1 and maintained high standards,” the source told Al Manassa. “But once the Egyptian company took over in 2003, performance deteriorated. For the first five years, they maintained the same quality, but then things declined steadily. By FY2015-2016, losses exceeded capital, and the state had to prop up the company financially.”
While government-imposed fare freezes worsened the operator’s financial burdens, the source said the company failed to seek alternative revenue streams or reduce maintenance costs.
“To avoid repeating past failures, the government now sets strict conditions for private contractors,” they added. “In the draft contract for the high-speed rail, the operator is required to generate revenue from commercial activities, not just ticket sales, and to perform regular maintenance to minimize operating costs.”
The same contract reportedly includes targets for freight capacity: “We will start with 9 million tons and scale up to 40 million tons annually by 2030.”
Egypt’s Railway Authority had tried in 2023 to bring in private freight operators, but, as Al Manassa reported, those companies struggled to meet volume targets.
Despite this, the government is continuing to seek private operators for other projects, including Cairo Metro Line 4, the Abu Qir metro, and Alexandria’s Raml tram.
Local partnerships preferred
Still, the government’s choices aren’t entirely its own. According to the source, Siemens—the main contractor on the high-speed rail line—stipulated that the operator must have prior experience running similar networks, which the Egyptian government lacks.
“The ministry was inclined to go with a joint venture involving Egyptian and foreign firms, rather than award the contract to an all-foreign operator,” the source said. The front-runner had been Italy’s state-owned Ferrovie dello Stato, but the requirement gave Egypt’s El Sewedy Group an opportunity to partner with Deutsche Bahn (DB), which manages Germany’s national railway.
| Project | Operating Company | Ownership | Contract year |
| Cairo Metro Line 3 | RATP DEV | Foreign private sector | 2020 |
| Cairo Metro Line 1 | Egyptian Metro Management and Operation Company | Egyptian government | 2021 |
| Cairo Metro Line 2 | Cairo Metro Line 2 Company | Egyptian government | 2021 |
| Light Electric Rail (Administrative Capital - Adly Mansour) | RATP DEV | Foreign private sector | 2021 |
| High-Speed Rail Network Line 1 (Ain Sokhna - Marsa Matrouh) | DB-El Sewedy | Egyptian-foreign consortium | 2025 |
| High-Speed Rail Network Line 2 (6th of October - Aswan - Abu Simbel) | DB-El Sewedy | Egyptian-foreign consortium | 2025 |
| High-Speed Rail Network Line 3 (Qena - Safaga - Hurghada) | DB-El Sewedy | Egyptian-foreign consortium | 2025 |
| High-Speed Rail Network Line 4 (West Port Said - Abu Qir, Alexandria) | Delta Consortium (El Deidy Group - CRIC Chinese Company) | Egyptian-foreign consortium | 2023 |
| Railway Sleeping Trains | Abela Egypt | Egyptian private sector | 2023 |
A second NAT board member confirmed that the ministry is negotiating with the DB-El Sewedy consortium over how to structure the contract. Two scenarios are on the table: one in which the consortium receives a revenue share and handles light maintenance, and another in which it receives a fixed annual fee and conducts full maintenance.
“The ministry welcomed the Egyptian-German bid and prioritized it over competing foreign offers,” the source said.
Previously, another Egyptian-foreign consortium, Delta, had been awarded a contract to build and operate the fourth segment of the high-speed rail system. However, the terms of that deal have not yet been made public.
Revenue and pricing
With private operators managing new transport infrastructure, the Ministry of Transportation will forfeit a portion of revenues in exchange for operational services. RATP Dev, for example, secured a 1.138 billion euro (65.3 billion Egyptian pounds) deal to run Metro Line 3 for 15 years—an average of 4.3 billion pounds annually.
The facilities management business was seemingly profitable for the company, prompting it to establish a branch in Egypt in 2020, becoming the first foreign operator of a major transportation project in Egypt.
The ministry, however, still sets the fares, even though it’s leaning towards liberalizing ticket prices, citing rising operational costs, which naturally include the fees collected by the private operator.
“Transport fares in recent years have been almost fully liberalized,” urban development expert Amr Essam told Al Manassa. “This is due to the high cost of construction and ongoing maintenance. The presence of private operators may become an additional driver of price increases, but not the primary one.”
“The government could help private operators grow revenue without raising fares by, for example, leasing station space or land adjacent to rail lines,” he added.
Essam also cited the light rail service to the New Administrative Capital as a case study. “Initially, tickets were priced to cover operating costs, but low ridership forced both the ministry and RATP Dev to lower prices. It’s likely that the state subsidized the operator to make up the shortfall,” he explained.
So far, the ministry has generally retained the right to set fares. One notable exception is a contract with Abela Egypt, a private company that operates sleeper trains.
Hassan Mahdy, a professor of engineering at Ain Shams University and a transportation expert, told Al Manassa that public support for transport services remains essential even under privatization.
“The state should subsidize tickets for public transportation facilities, as it’s a collective means relied upon by a large segment of the population,” he said.
“The Ministry of Transportation has actually applied this model to the shuttle bus, where the service fare is now less than other methods, whether microbuses or mass transit buses.”
Private sector involvement in public transport may raise fares, but experts say it also offers the potential to enhance service and generate new revenue, without always relying on commuters to foot the bill.