The Egyptian railway sector has been at the epicenter of the current Administration's development plans for a more connected and more fluid trade and urban activity across the Egyptian territory. The Egyptian National Railway ("ENR"), acting as the national railway operator, has been significantly involved in the overall improvement of the national railway network and the implementation of new mega-projects. There is presently enormous traction in the sector and ENR is seeking a closer-than-ever cooperation with the private sector to realize the ambitious vision of the State.
New ENR-Specific Procurement Rules
In April 2021, the Egyptian Ministry of Transport ("MoT") issued Decree 191 for 2021 which sets forth the procurement rules applicable to ENR ("Decree"). The Decree is, to a large extent, modelled on the more general public procurement rules enacted under Law 182 for 2018. The Decree, however, has precedence over the latter.
The purpose of the Decree was to stimulate the procurement process by developing a separate set of rules that would allow ENR to operate in a more efficient and autonomous fashion. It acknowledges the typical competitive tendering process as well as direct contracting (subject, however, to certain conditions).
The Decree permits ENR to offer assets for long-term lease, enter into a transaction involving a related/compound network of agreements, or BOT arrangements including variants thereof.
Separately, law 152 for 1980, the legal text establishing ENR, was amended in 2018 to reverse the State monopoly over the railway sector and pave the way for more investments by the private sector through partnerships with ENR and a concession model.
Recent Landmark Deal with the Private Sector
Last July, the MoT announced through its official website that ENR has penned what is a first-of-a-kind public private partnership with the Austrian company voestalpine Railway Systems, the market leader for railway infrastructure system solutions, for the management and operation of existing turnout production facilities of ENR.
The project reflects the ambitious agenda of MoT to move ahead with a comprehensive plan to modernize the Egyptian railway industry with the aid of the private sector and localize foreign expertise in the process.
AMERELLER law firm is proud to have advised voestalpine Railway Systems on all aspects of the project, including the drafting and negotiation of the project documents.
This could be the catalyst for a greater cooperation with the private sector in the near future for what is a critical public utility that is in dire need of investment.
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