All means of transportation across Egypt have been getting increasingly more expensive

Newsletter

03 Aug 2022

From Uber to Metro, all means of transportation across Egypt have been getting increasingly more expensive one by one as ride-hailing companies as well as public transportation and everything in between decide to increase their fees in light of the latest fuel hikes in July. With the metro and train fees being anticipated to be raised this month, citizens weigh in on how this might affect their budgets. On July 17, the Fueling Automatic Pricing Committee in its quarterly review increased fuel prices for various octane levels by EGP 0.5 to EGP 1 per liter in light of the global rise in oil prices. Prime Minister Mostafa Madbouly had said earlier in July that the increase in transportation prices would not exceed 7%, calling on citizens to report drivers who exaggerate the increase in prices.

Following the fuel committee’s decision, taxis, microbuses, and public buses across the country raised their transportation fees by 5-7%. Meanwhile, private ride-hailing companies including Uber and Swvl have followed suit, increasing their fares also by the same range.
However, the recent increase was one of too many that preceded in the previous months. Combined, the increases make up about 40%, adding that in the long run, it has completely altered his monthly budget. On the other hand, public transportation rides have risen by about 16%. The only means of transportation that haven’t risen so far is the metro.
The anticipated increases in the prices of metro and train tickets in Egypt are set to be applied later this month.
It is worth noting that the ministry previously announced that the increases in tickets price were set to be effective from August 1st. However, the increases were not determined yet, El-Wazir pointed out back then, adding that they could range between 1 EGP and 2 EGP. (Arab Finance)
The Egyptian National Railways (ENR) has settled debts of 83 billion EGP owed to the Central Bank of Egypt (CBE), the Ministry of Finance, and banks.
The ENR will still have to pay out dues of 5 billion EGP to the Ministry of Petroleum, in addition to, settling an annual deficit estimated at 1 billion EGP. Before the debts’ settlement, the ENR was in debt with total dues estimated at 88 billion EGP. The Ministry of Finance supports students and uneconomical rail lines with an amount of 5.5 billion EGP, urging the finance ministry to increase the support. The minister also stressed that the ENR needs 1.1 billion EGP to curb the deficit between revenues and spending. (Arab Finance)
Egypt does not seek a financial assistance worth $15 billion from the International Monetary Fund (IMF), according to the Minister of Finance Mohamed Maait.
“This figure is absolutely inaccurate,” the minister said, stressing that the government has not requested such a loan from the IMF. Maait did not mention the value of the anticipated loan or whether it would be received in tranches or not. All the details regarding this loan will be disclosed once Egypt reaches a final agreement with the IMF, he noted. (Arab Finance)
In the same vein, Goldman Sachs Group has estimated that Egypt could need to package valued at 15 billion USD from the IMF.
Over the past years, Egypt has been among the biggest borrowers from the IMF, with the three-year 12 billion USD loan program in 2016, in addition to the recent 5.2 billion USD stand-by arrangement (SPA) and the 2.8 billion USD under the Rapid Financing Instrument (RFI). (Bloomberg)
Total targeted investments of the Egyptian transport sector are estimated at around 307 billion EGP in the general plan for fiscal year (FY) 2022/2023, versus 240.7 billion EGP for the previous FY.
The production of the transport sector at current prices is targeted to reach 672.4 billion EGP in FY 2022/2023, higher by 14.7% from 586.5 billion EGP in the basis year 2021/2022. The real production of the sector is estimated at 614.6 billion EGP, with a growth rate of 4.8%. Meanwhile, the output of the transport sector is forecast to record a growth rate of 16.2% in FY 2022/2023, targeting to reach 442.4 billion EGP at current prices, compared to 380.6 billion EGP in FY 2021/2022. (Arab finance)
The Egyptian Suez Canal has recorded a 32.4% year-on-year (YoY) growth in revenue in July 2022. Revenues amounted to 704 million USD in July 2022, compared to 531.8 USD billion in July 2021.
The number of ships transiting the canal rose by 25.9% YoY, registering 2,103 vessels, compared to 1,670 ships in the same period of 2021. Moreover, the SCA’s chairman pointed out that transit cargos increased by 18.2% YoY, with net tonnage reaching 125.1 million tons last July, versus 105.8 million tons in July 2021. It is worth noting that revenues of the canal amounted to 1.691 billion USD in the first quarter (Q1) of 2022, rising by 20% from 1.409 billion USD in Q1 2021. (Bloomberg Asharq)
And for our investments talks, Abu Dhabi-based Aldar Properties could invest about 1.5 billion USD in Egypt, Saudi Arabia, and the UAE over the coming six to 12 months.
The Emirati real estate developer is waiting for “the market to ease back a little bit” before making any purchase deals. In February, Aldar’s Chief Financial Officer (CFO) Greg Fewer said that the real estate giant plans to invest nearly 1.36 billion USD this year to acquire retail and education asserts, mainly in the UAE, Egypt, and Saudi Arabia. (Bloomberg Asharq)
Arab Developers Holding (ARAB) is planning to make investments worth around 1.5 billion EGP during 2022 to accelerate the construction and delivery process.
The Egyptian real estate developer is targeting revenues ranging between 3.6 billion EGP and 4.1 billion EGP for the next two years. Additionally, the company is intending to generate around 2.8 billion EGP in sales from all projects. Since the beginning of 2022, Arab Developers has raised the prices by an average rate of 10%. (Hapi Journal)
Moving to our EGX and companies talks, Madinet Nasr Housing and Development (MNHD) has launched the first phase of Elect, its latest development at Taj City project in New Cairo.
Since the launch of the project on July 26th, the company has sold 50% of Elect’s first phase, with sales recording about 400 million EGP in two days. The successful launch of Elect comes as part of the company’s continuous development of its land bank at its 3.5-million-sqm mixed-use Taj City. It is noteworthy that over 43% of MNHD’s land bank at Taj city was not launched at the end of the first quarter (Q1) of 2022. (Hapi Journal)
Orascom Construction PLC (ORAS) posted a 55% year-on-year (YoY) increase in its new awards during the second quarter (Q2) of 2022, adding 1.8 billion USD to its backlog. This brings total new awards to 2.4 billion USD in the first half (H1) of 2022.
Projects in Egypt accounted for 70% of total new awards in Q2 2022, with the group boosting its business in the country through the development of the new high-speed rail system and the signing of the new 1,325-kilometer phase of the project. Meanwhile, new awards in the US made up 30% of total projects in Q2 2022, and they were mainly in the data center and commercial fields. (EGX)