The move is part of broader efforts to boost green transportation in Alexandria, the country's second-most populous governorate.
The consortium involves state-owned Arab Contractors and privately owned Hassan Allam Construction.
Alexandria’s tram system, built in 1860 and operational since 1863, is the oldest in Africa and among the earliest in the world.
It remains a key means of transport for residents alongside other above-ground options.
During the signing, Minister of Transport Kamel El-Wazir said the project would span 13.2 km with 24 stations. Of this, 5.7 km will be at surface level, 7.3 km elevated, and 276 m underground.
The line will run west from Victoria Station, passing through key areas including San Stefano, Sidi Gaber, and Raml.
El-Wazir added that it will intersect with the under-construction Alexandria Metro Line, allowing passengers to interchange at Victoria and Sidi Gaber stations.
Moreover, he said the project is expected to slash travel time on the route from 60 minutes to 35 minutes by increasing operating speed from 11 km/h to 21 km/h and reducing headway time from nine to three minutes.
He noted that it will also raise passenger capacity from 4,700 to 13,800 travellers per hour in each direction, easing congestion and reducing environmental impact.
In June 2024, Egypt signed a contract with South Korea’s Hyundai Rotem to supply 30 new tram units in preparation for the upgrade.
The tram project coincides with constructing the first phase of Alexandria’s first Metro system, marking a major expansion of the city’s green transport network.
Alexandria, founded in 332 BCE by Alexander the Great, is Egypt’s second capital after Cairo. It is located on the Mediterranean Sea and is now home to 5.6 million people.
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