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Egypt metro awards 5-year advertising concession to sole bidder for LE175m

Metro management company still embroiled in legal dispute over 10-year concession awarded shortly before January 2011 revolution

Deya Abaza , Wednesday 5 Nov 2014
Views: 2467
Views: 2467

A state-owned railway management firm has acquired exclusive rights to advertise in Cairo underground's three lines for LE175 million ($24.5 million) over the next five years, the Egyptian Company for Metro Management and Operation said on Wednesday.

The concession was awarded to the Egyptian Railway Projects and Transport Company (ERJET), the only bidder in the auction which was first announced by the metro's management last August, an official told Ahram Online.

"We first advertised the auction in August of this year, and no one but ERJET made an offer, despite the fact that we delayed the auction several times," Mohamed Abu El Ela, General Manager for Procurement and Warehousing at the metro company, told Ahram Online.

The metro company is still embroiled in a legal dispute with Al-Ahram's Advertising Agency, which was previously awarded the concession.

Al-Ahram advertising, which has been managing the metro's advertisements since its inception in the late eighties, had been awarded a ten-year concession in 2010, to advertise on the then-two metro lines, for a total of LE256 million pounds.

The January 2011 revolution and the subsequent turmoil hit the agency with heavy losses, prompting it to take the matter to the courts when negotiations with the metro failed to yield a settlement.

"The authorities closed major stations, including Anwar El Sadat station in Tahrir Square, and ads we had brought to 55 stations were vandalised," an agency employee who managed the metro portfolio told Ahram Online.

The winner of the new concession, ERJET, is a fully-owned subsidiary of the Egyptian National Railway (ENR), which manages the non-operational assets of the ENR, including advertising in railway stations.

According to Abu El Ela, few offers were received by the metro company in the latest auction "because no one could afford to pay the high price of the concession," he said referring to the LE175 million deal.

The Cairo underground sees some 3.5 million passengers a day, according to the management company.

A new phase of Cairo's third metro line linking Abbasiya and the northeastern suburb of Heliopolis was inaugurated earlier this year.

Once completed, Cairo's third metro line will stretch 43.5 kilometres from Cairo airport to Imbaba in Giza.

A fourth line is due to be completed by 2019.

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