The Transportation Ministry is planning to increase railway ticket prices by up to 20-25% for certain lines, in addition to a bigger increase for suburban railway lines, Transport Minister Hisham Arafat said by video conference at the opening of a number of national projects on Monday.
The minister did not specify the increase for suburban short-distance lines, but said they are the main source of financial losses for the railway system, as 190 million people use them per year and pay only EGP 1.25 per 70 kilometers.
As for long- and medium-distance trains, the minister said their tickets are covering their cost of operation, but that losses are increasing with the cost of maintenaince.
The minister previously announced last month that railway ticket prices would increase before the end of June 2018.
The railway system is EGP 40 billion in debt, in addition to yearly losses, Arafat said.
The National Railway Authority collects EGP 1.9 billion from long- and medium-distance trains, and EGP 250-300 million from cargo transport.
Total expenditures of the railway system are worth EGP 5.5 billion and total income is about 2.3 billion.
“The pricing system is very poor, in addition to the fact that cargo transport is moving away from the railway,” Arafat said.
Arafat attributes to the moving away of cargo transport from railway to land transport to the 30-year long diesel fuel subsidies system provided by the government.
The railway system is also facing planned upgrades. By 2022, EGP 52 billion is planned to be spent on the railway system, Arafat said.
The ministry is seeking new sources of revenues, namely from advertisements.
The ministry signed an advertising contract worth EGP 1.3 billion, Arafat announced, saying it is a first in the history of the Egyptian railway.
The ministry started with developing the infrastructure and the cargo transport system.
"The important thing is that Egyptians receive a service in exchange for the increase you want to implement and that the increase is convenient," President Abdel-Fattah El-Sisi told Arafat.
A total of 12.5 billion will be spent on projects for electrifying signals, the biggest amount to date to be spent on railway infrastructure in Egypt, Arafat said.
“We will see a different railway system starting mid next year ... a qualitative improvement will be felt by March/April 2019," Arafat said.
Signals modernization on the Cairo-Alexandria line from an electromagnetic to an electric system will follow the Safety Integrity level 4, the highest level worldwide, Arafat said.
Parliament's Transportation Committee approved last week amendments to allow the private sector to invest in the railway system through construction, management, and maintenance services.