UK train manufacturer named preferred bidder for €4.4 billion contract

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Bombardier Transportation has been named by the Egyptian Government as preferred bidder to build and operate a new monorail system, including supplying rolling stock, to a new trainline in Cairo.

This project was announced by the Secretary of State for International Trade and President of the Board of Trade, Dr Liam Fox during his visit to Egypt.

Dr Fox is currently on a four-day visit to Egypt, Morocco and Tunisia to highlight the wealth of opportunities for trade and investment in the region.

The total value of the Engineering Procurement and Construction deal is about €2.8 billion of which the BT value is roughly 50%. In addition, there is an Operations and Maintenance deal with a value of about €1.6 billion.

The monorail system is a 54km line connecting the New Administrative Capital with East Cairo and a 42km line connecting 6th October City with Giza.

International Trade Secretary, Dr Liam Fox, said:

This is a strategically important project in a growing market like Egypt, demonstrating how UK manufacturing expertise is competing and winning in global markets against tough competition. The global headwinds are getting stronger and we face a world economic slowdown. But the UK now has an international economic department – the Department for International Trade – helping British business succeed abroad in ways that never happened before.

The British rail industry is world class. Derby has been making trains for 180 years, and this project shows that the Derby Litchurch Lane facility remains globally competitive.

Phil Hufton, President UK, Bombardier said:

Being named as preferred bidder for the Cairo Monorail is excellent news for Bombardier and for our teams in the UK and in Egypt. It shows that the British rail industry is world class and can compete and win in global markets. We welcome the Government’s support for our bid.

The project involves both the civil engineering of the monorail infrastructure, as well as manufacturing of the cars themselves, at Bombardier’s Derby facility in the UK for export to Egypt.

The bid is supported by UK Export Finance (UKEF). Bombardier will deliver the project in partnership with two Egyptian companies; Orascom Construction and the Arab Contractors.

The project will involve investing in a new, dedicated monorail production line at Litchurch Lane able to build the monorail cars between 2021 and 2024.

Adding monorail capability also shows the versatility of the 88-acre site, able to build the cars in addition to our currently building the cutting-edge AVENTRA train for TfL and for UK franchises.

Following the announcement of the preferred bidder, the winning consortium and the Egyptian Government will start contract negotiation for the Engineering Procurement and Construction contract to reach successful contract signature and will work together with the financing institutions to achieve financial close and sign the financing deal agreement between the Egyptian Government and the Financing Institutions. Successful achievement of both events will lead to the formal commencement of the contract execution.

Notes

The New Administrative Capital is located in the area between the Cairo-Suez and Cairo-Ain Sokhna roads, east of the regional ring road. This is roughly 60 km from the cities of Suez and Ain Sokhna. The new capital is planned to be a sustainable city, housing the ministries, Parliament, Egyptian Media Production City, presidential palaces, and embassies.

The two monorail lines (New Administrative Capital and 6 October City) will be linking both cities with the current city of Cairo and will be able to transport around 45,000 passengers per hour in each direction when it reaches its ultimate capacity. The lines will have 70 train fleets (with 4 cars per train) to support the operations and can be expanded in the future to reach the ultimate capacity.

The line will support the mobility of the Egyptian people commuting between the 2 cities and Greater Cairo as the first mass transit links that connects both cities with Greater Cairo. With 80km/h operating speed, the journey time for the New Administrative Capital is about 60 min (for 54km line) and 42min for 6 October City (42km line).

Derby has been making trains for 180 years this year. Bombardier have owned the iconic Derby Litchurch Lane factory since 2001, and it is the only site in the UK where trains can be designed, built and tested.

UKEF, the UK’s export credit agency and a Government Department, currently has £1bn of financing capacity available on efficient commercial terms to support UK export projects in Egypt, as well as experience of working with partner financial institutions to increase the overall value of support.

Notes

  • Latest statistics from the ONS show UK firms sold more overseas in the 2018/19 financial year, £639.9 billion, than at any time since records began
  • The UK has now achieved 36 consecutive months of export growth on an annual rolling basis
  • Separate OECD data shows UK exports grew faster than Germany, France and Italy between 2016 and 2018

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