Negotiations between Egypt and China over an electric train to run between the cities of Al-Salam and Belbeis have failed after Transport Minister Saad al-Geyoushi asked the Chinese to invest in the project instead of granting Egypt a loan for it.
The Chinese were dismayed at the minister’s sudden request, especially given that the project was submitted to President Abdel Fattah al-Sisi to ratify prior to the signing of the final contract during the upcoming visit of the Chinese president to Egypt in January.
For his part, Geyoushi said the decision to convert foreign loans into investments aimed to avoid more burdens on foreign debt, as Egypt is a promising investment market in which many countries wish to invest, particularly in infrastructure.
A source at the Chinese company said turning the loan into an investment would raise the price of a ticket from LE7 to LE20, explaining that the loan bears an interest rate of 2 percent to be paid over 25 years with a grace period of five years.
The source also said that this would raise the cost of the project, entail an interest rate of 5 percent and postpone it until 2017 at least, although China had agreed to reduce the cost of the project from $1.8 billion to $1.5 billion and reduce the number of Chinese experts working on it and replace them with Egyptians.
Edited translation from Al-Masry Al-Youm
