Fare hikes without brakes: Runaway debt derails Egypt’s railway reform
In past years, every new increase in train ticket prices was justified by a rationale that shifted between rescuing Egypt’s railways from a loss-making cycle and avoiding further strain on the budget deficit. Indeed, for the first time in many years, the National Rail Authority (NRA) succeeded in achieving a surplus of 722.2 million Egyptian pounds ($14.4 million) in the fiscal year ending July 2025, according to authority sources who spoke to Al Manassa.
Yet despite this, nearly a year after achieving this surplus, the NRA raised fares again. This time the reasons are different and include mounting debt alongside rising fuel prices. Rights advocates believe, however, that ticket subsidies are a priority, even at the expense of the budget deficit.
Reform derailed
About six years ago, the NRA opened a new chapter in its borrowing policy by turning to bank loans, having previously depended primarily on overdrafts from state-affiliated entities, most notably the National Investment Bank.
“We’d draw down whatever we needed: spare parts, salaries, running costs, project work. But before the end of the 2019/20 fiscal year, the government decided to stop this system. Funding needs are now provided in the form of local bank loans guaranteed by the finance ministry,” an NRA board member told Al Manassa.
The goal of this move was for borrowing policies to be more rational, given that bank borrowing is based on rigorous feasibility studies, unlike overdrafts, the official explained, requesting anonymity.
NRA began severing its financial ties with the National Investment Bank (established in 1980) years ago, as part of a broader government plan to clear inter-agency arrears owed to the bank. This helped the authority significantly reduce its legacy debt, according to a second source on its board who spoke to Al Manassa.
The source, who also requested anonymity, estimated that the railway’s debt to the National Investment Bank reached 80 billion pounds (about $1.6 billion). Of that, 10 billion pounds (about $200 million) was written off in 2016, and the bank acquired land from the railway equivalent to 44 billion pounds (about $880 million) in 2021. Then, 26 billion pounds (about $520 million) were written off within the framework of the government’s plan to clear arrears between state bodies.
Under the new strategy, NRA will cover only the loan interest payments, while the Finance Ministry pays the principal as a form of subsidy—a policy implemented in 2021/22, the first source confirmed.
These financial reforms coincided with ticket price increases in 2020, 2023, 2024, and 2026 to boost revenues Yet no sooner were the old ledgers cleared than fresh financial burdens began to accumulate. To fulfill the ambitions of Transport Minister Kamel Al-Wazir to rapidly modernize the transport network’s infrastructure, large loan agreements were concluded in a short period, driving up the NRA’s debt-servicing costs.
“Between 2019–2020 and the end of the 2024/25 fiscal year, the authority’s average annual loans ranged between 15 and 25 billion pounds (about $300 million and $500 million),” the second source confirmed.
| Year | Amount | Curr. | Purpose | Lender |
| 2020 | 1.16 billion | euro | Purchase of 1,300 carriages | Hungarian Export-Import Bank and the Russian State Export-Import Bank |
| 2020 | 602 million | dollar | Supplying 110 locomotives, upgrading 81 locomotives | European Bank for Reconstruction and Development |
| 2021 | 466.1 million | dollar | Supplying 50 new locomotives, upgrading 50 locomotives, and overhauling 41 locomotives | UK Export Finance |
| 2021 | 362.9 million | euro | Upgrading the quality of railway services | World Bank |
| 2023 | 400 million | euro | Implementing the Cairo-Alexandria trade logistics line upgrade project | World Bank |
Even though the new framework required the NRA to pay only the interest on these debts, the size of these interest payments has risen sharply in recent years, pushing the authority back into loss, according to data Al Manassa compiled from NRA officials.
Fuel costs also to blame
According to data collected by Al Manassa from railway officials, after achieving a surplus in the fiscal year ending in July 2025, the NRA incurred net losses in 2025/26 of about 530 million pounds (about $10.6 million).
Debt is not solely responsible for this loss; there are also running costs that have risen rapidly of late with successive fuel price hikes. “Every one-pound increase in fuel prices raises the authority’s expenses by an additional 900 million to 1 billion pounds ($18 –19 million) annually,” according to the first NRA source.
The 2025/26 fiscal year saw two increases in the price of diesel, the railway’s primary fuel: the first in October 2025 and the second in March 2026, raising its cost during this period by a total of nearly 30%.
The first source said fuel price hikes have knock-on inflationary effects, driving up the cost of raw materials and spare parts while raising compensation paid to contractors executing renovation and modernization projects.
According to data Al Manassa collected from NRA officials, the cost of raw materials, fuel, and debt-servicing costs in 2025/26 reached about 6 billion pounds (about $112 million), compared to about 7.5 billion pounds (about $150 million) in ticket revenues.
Alternatives to raising fares
According to both sources, the factors above are behind the ticket price increases during the first half of 2026. The first, in late March, included a 12.5% increase for long-distance trips and 25% for short-distance ones. At the beginning of July, the ministry applied a second similar increase.
The first source does not expect Egypt’s railways to break the loss cycle this year, despite government attempts to alleviate its financial burdens. The finance ministry still provides an annual suburban-fare subsidy of about 5.5 billion pounds (about $110 million), alongside a ministry contribution of 10.5 billion pounds (about $210 million) to the authority’s capital to reduce its total loan value by 28 billion pounds (about $560 million).
Conversely, Mohamed Ramadan, an economic researcher at the Egyptian Initiative for Personal Rights, criticized treating the authority as a profit-and-loss operation, ignoring the broader economic and social impact provided by low-cost public transport.
Ramadan stressed that continuing to raise ticket prices diminishes one of the most important advantages of the railway: providing an affordable means of transport for millions of citizens, especially low-income earners who rely on it for daily commuting between governorates.
He pointed out that maintaining low transport costs achieves indirect returns for the state by supporting labor mobility, reducing the cost of living, and boosting economic activity, gains that exceed whatever can be collected from raising ticket prices.
The Authority, then, has not broken the loss cycle, despite everything millions have suffered from its service price hikes over past years. This is not necessarily bad news if we view it from the angle of those millions’ interest in securing an essential transport service, rather than solely from the angle of the budget deficit.