CAIRO — General Electric, America’s long-standing digital industrial company, recently agreed to a massive locomotive deal with Egyptian National Railways (ENR). The deal includes 100 Light Evolution Series locomotives usable for passengers or for freight. It also covers a 15-year agreement to keep supplying parts, technical support and upgrades to ENR to improve Egypt’s railway infrastructure. This deal will increase ENR’s fleet from 80 locomotives to 180 GE engines.
The transaction is worth about $575 million, a huge investment from GE. But GE sees this as more than just an opportunity to grow financially. The company sees it as an opportunity for both Egypt and Egypt’s railway to grow.
Egypt’s current locomotive fleet is full of aged engines, 30 years old on average. These older engines have caused a plethora of problems for Egyptian customers. These older engines are liable to break down and have a history of maintenance issues. This leads to safety and accessibility issues, making train rides dangerous or expensive for passengers. Trains often carried both freight and passengers at the same time due to decreased availability. The older models also release high levels of carbon emissions and greenhouse gases, and cost an increasing amount to run.
But under this new deal, both GE and ENR plan to change all of these issues and create better opportunities for all Egyptians.
Light Evolution Series
The Light Evolution Series trains are GE’s newest Tier 3 Locomotives. They are the most fuel-efficient trains in the North American market. These trains use 11 percent less fuel than the average locomotive when operating under full utilization. Just one locomotive can save the owner an estimated $83,000 in annual diesel fuel costs and significantly lower carbon emissions. With the 15-year upkeep as part of the deal, these new locomotives will be maintained and kept safe for the passengers for years to come.
These upgrades will substantially increase efficiency for Egypt’s railway. Since 2011, upon the removal of Egypt’s long-term president Hosni Mubarak, ENR’s production dropped 60 percent in freight transported in just four years.
With this new system, ENR hopes to transport 25 million tons of goods over the next five years, a significant increase from the 3.84 million tons transported in 2014. ENR hopes to decrease Egypt’s problematic road traffic by having more companies transport goods on rail instead.
ENR also plans to transport more passengers, as it expects millions of commuters to benefit from the locomotive upgrades. One of the first projects GE will build is a passenger line between the cities of Mansoura and Damietta, and a freight line between the phosphate mine of Abu Tartar and Safaga port.
These lines will open up new opportunities for residents in these areas; it will be easier to find jobs given the more accessible commute, and new jobs will be necessary given the creation of these railways and the phosphate ports.
New Jobs, New Influence
New jobs have already started emerging; GE is installing a comprehensive freight reform program and commercialization plan in Egypt. This plan will involve GE training around 275 ENR engineers on how to use the new locomotives. This will provide new opportunities for jobs and more complex jobs for existing engineers already working on Egypt’s railway.
GE has a wide influence in the Middle East, with a presence in over 19 countries. It currently supports electricity in two-thirds of its present region, purifies 800 million liters of clean water daily, and provides top-notch medical equipment to 90 percent of its region’s hospitals. GE’s mission is not just about growing its own company but helping its customers gain sustainability. Plans to build similar development programs for electricity and water are highly probable given the 15-year deal. GE has also expressed interest in investing in Turkey and Algeria after the deal with ENR.
GE and ENR both see great potential for Egypt to grow in several areas due to this investment. Janet Heckman, EBRD Managing Director for the Southern and Eastern Mediterranean region, calls this deal a “key step” in developing the lives of everyone in Egypt. With the easier transport, efforts to provide aid to impoverished people and regions will also increase. Better reliability for Egypt’s railway will not only lead to the improvement of the quality of people’s lives, but consequently improvement for the whole economy.
– Sydney Cooney