The debts of the National Authority for Tunnels reached record levels that exceeded the EGP 2 trillion barrier in mid-2026, coinciding with the Egyptian House of Representatives’ approval, last June, of a new loan worth EUR 3,902,430,000, obtained by the Authority to finance the second and third lines of the high-speed electric train network, under an agreement with European banks guaranteed by the German export credit agency “Hermes”.

This came three months after parliament’s approval of four financing agreements worth $332 million to complete the Light Rail Transit (LRT) project; the Authority had obtained in November 2024 loans and credit facilities from Abu Dhabi Commercial Bank and Arab Bank worth EGP 4.5 billion to finance the monorail and Light Rail Transit (LRT) projects.

The Authority accounted for about 60% of total loans and credit facilities for economic authorities in the general budget for the 2026/2027 fiscal year, at EGP 257.727 billion out of a total of EGP 459.253 billion; meanwhile, the total loans obtained by the Ministry of Transport to implement a number of national projects for the railway and metro authorities alone reached, by March 2026, about $18 billion, according to televised statements by the Minister of Transport, Kamel El-Wazir.

For years, the Authority, established by Law No. 113 of 1983, has suffered successive financial losses: they amounted to about EGP 1 billion and 300 million in the 2021-2022 fiscal year, according to Dr Tarek Gowaily, chairman of its board of directors, while losses in 2022-2023 amounted to about EGP 1.896 billion, against a rise in long-term liabilities and supplier dues to EGP 105.5 billion by the 2023-2024 fiscal year, an increase of EGP 31.2 billion over the previous year, according to media reports.

The statistical statement of the draft general state budget revealed that the losses of the National Authority for Tunnels in the 2024-2025 fiscal year exceed EGP 44 billion, and the Authority topped the list of the biggest loss-makers among 59 economic authorities in the statistical statement of the economic authorities for the 2026/2027 fiscal year, recording on its own about 66.3% of the total losses of those authorities, estimated at about EGP 96.9 billion.

On the other hand, official data show that the Authority’s revenues amounted in the 2021-2022 fiscal year to about EGP 3.166 billion, while the cost of activity amounted to about EGP 651 million, divided between wages of EGP 193 million and fuel, materials and spare parts of about EGP 458.2 million, and the Authority made profits of about EGP 2.515 billion; in 2022-2023 it made a net profit of about EGP 3.536 billion, in 2023-2024 its profits approached EGP 3 billion, and its profits amounted in the 2024-2025 fiscal year to about EGP 4.350 billion.

The Authority faces a large financing gap, as its expenditure amounted to about EGP 74 billion while its revenues did not exceed EGP 8.8 billion, meaning losses of EGP 63 billion in the coming budget; the total budget estimates of the National Authority for Tunnels for the 2026/2027 fiscal year amounted to about EGP 430 billion and 823 million, compared with EGP 351 billion and 127 million in the previous fiscal year, 2025/2026, recording an increase of EGP 79 billion, a growth rate of 22.7%.

That gap between revenues and expenditure, amounting to about EGP 65 billion, along with the size of the Authority’s debt, prompted MP Mahmoud Samy El-Emam to issue a warning under the dome of parliament of a real financial crisis requiring a comprehensive restructuring of the Authority and the setting of a clear vision for sources of repayment before any new obligations are added, amid the rising burden of debt on the state.

The MP believes that the Authority’s financial indicators confirm the difficulty of continuing to classify it as an economic authority, given the widening gap between revenues and expenditure and the continued reliance on borrowing to finance its projects: its revenues do not exceed EGP 8.8 billion against expenditure approaching EGP 74 billion, of which about EGP 63 billion is interest on debts, considering that these figures make it unrealistic to expect the Authority to be able to cover its obligations in the short and medium term, especially with the continued implementation of new projects requiring additional borrowing.

He stresses to Zawia3 that a large part of the crisis stems from the conversion of the Authority from a service body into an economic authority, even though the nature of its work does not allow it to achieve direct financial returns sufficient to cover the cost of financing, proposing that it be restructured and returned to the general state budget, given that its projects pursue social and developmental purposes, such as developing new areas, encouraging industrial and agricultural investment and stimulating the movement of the population to new urban communities, benefits that accrue to the economy indirectly and do not generate direct revenues for the Authority itself.

He says: “The Authority currently oversees four major capital-intensive projects, namely the metro, the monorail, the light electric train and the high-speed electric train, and these projects require huge investments that cannot be recovered through ticket prices, even with the recent increases, which makes continuing to classify the Authority as an economic authority impractical”.

The MP stresses that limited resources necessitate a rearrangement of spending priorities, as completing the metro projects should receive top priority because it directly serves millions of citizens, while some other projects, such as the monorail and some phases of the high-speed electric train, could have been postponed until financial conditions improved.

He adds: “The second phase of the high-speed electric train project, which links areas in greater need, should have received priority before the implementation of the first phase, and the monorail project raises questions about its feasibility given that it is being implemented on routes passing through areas that are still of low population density”.

The MP does not attribute the rise in the Authority’s losses to weak operating revenues so much as he links it to the burdens of debt service, as the value of the losses almost equals the value of the interest due on the loans, reflecting, by his estimate, that the volume of borrowing has exceeded the Authority’s financial capacity to repay.

El-Emam puts forward two options for addressing the crisis: the first is returning the Authority to its status as a service body whose debts and financing obligations are borne by the general state budget, while the second is based on separating operating expenditure from financing burdens, so that ticket revenues cover daily operating costs such as wages, energy and maintenance, while the state bears the cost of interest, as it results from projects of a national and developmental nature that cannot be evaluated according to criteria of commercial profitability.

In 2020, the National Authority for Tunnels had been converted from a service authority into a profit-oriented economic authority with a budget independent of the general state budget, allowing it to invest its funds through activities that cover the costs of expenditure and maintenance outside the state budget.

However, in 2025 the Egyptian government set about restructuring the economic authorities, and reduced their number to 30 authorities out of 59, with some of them being incorporated into the general state budget.

A Flaw in the Ordering of Spending Priorities

The total cost of financing the Light Rail Transit (LRT) project amounted to about $1.6 billion, through a package of international loans and local contributions during the period from January 2019 to March 2026; of this, $1.239 billion was for the first and second phases, through two financing agreements that include a loan worth the equivalent of approximately $674 million and a loan from the Chinese Ministry of Commerce worth $53 million, on long repayment terms of about 20 years and grace periods ranging between two and ten years, at concessional interest rates of between 1.8% and 2%; and in September 2023 the Export-Import Bank of China approved additional financing worth $400 million to cover the costs of the third phase of the project.

Meanwhile, the total cost of the monorail project was estimated at about EUR 4.5 billion, and the project relied on an international loan worth EUR 1.88 billion provided by a consortium of global banks led by “JP Morgan”, guaranteed by UK Export Finance, which alone contributed about GBP 1.7 billion; the National Authority for Tunnels also borrowed about EGP 5 billion from local Egyptian banks in 2025 to cover the construction and civil works carried out by “Orascom Construction” and “Arab Contractors”.

The total loans for the high-speed electric train project, to link the New Administrative Capital and the Ain Sokhna area with Alexandria and the Mediterranean Sea, amounted to about EUR 2.9 billion, including financing through international institutions of about EUR 2.26 billion and a direct loan from the Islamic Development Bank worth EUR 318 million.

President Abdel Fattah El-Sisi issued Decree No. 145 of 2023 approving the financing agreements for the first line of the high-speed electric train network, which included loans from several European banks guaranteed by the German export development agency amounting to EUR 1.99 billion, in addition to a loan guaranteed by the Italian export development agency worth EUR 268.8 million, to cover the cost of building the network’s first line.

MP Diaa El-Din Dawoud believes that the large gap between the revenues and expenditure of the National Authority for Tunnels reflects, in essence, a flaw in the ordering of public spending priorities, stressing that his objection to the expansion of a number of national projects stems from what he describes as “the jurisprudence of priorities”, the position adopted by the opposition, led by the (25-30) bloc, since the implementation of these projects began under the governments of engineer Sherif Ismail and Dr Mostafa Madbouly.

He stresses to Zawia3 that the state, after years of political turmoil, needed to direct its resources more towards investment in health, education and building human capacity as the foundation of sustainable development, instead of expanding projects that depend to a large degree on imported components; he believes that weak investment in industry, education and scientific research has kept the implementation of major projects dependent on abroad, raising their cost and increasing the need for borrowing in foreign currency.

He says: “Modern transport projects, such as the high-speed electric train and the monorail, in principle represent advanced means of transport that society needs, but the timing of their implementation and the scale of their expansion were a matter of disagreement, given their reliance on high-cost external financing, and debt-service burdens have come to absorb a large proportion of general budget uses, limiting the state’s ability to direct resources to other sectors”.

Dawoud stresses that mass transport projects should not be evaluated by the logic of direct profitability, because they represent a basic obligation of the state, and contribute to improving the efficiency of economic movement, reducing traffic congestion and raising citizens’ productivity; he gives the example of the metro, considering that its absence would have led to traffic and economic paralysis in Cairo, because of its role in facilitating citizens’ movement to workplaces and services.

On the other hand, he believes that expansion into new projects must be subject to a careful assessment of the state’s financial capacity and its development priorities, explaining that realising the dream of building projects such as the monorail and the electric train must be linked to the extent to which the economy is ready to bear their cost, and to their ability to serve large numbers of citizens efficiently.

Regarding continued borrowing to complete existing projects, he stresses that those that have already entered implementation should be completed, because stopping them after billions of pounds have been spent would waste the investments made, and operating them may achieve part of the hoped-for economic and social returns; but at the same time he believes that expanding the launch of new projects needs a comprehensive review, calling for a reconsideration of the philosophy of spending and borrowing, and for subjecting major projects to more consultation and study before decisions on their implementation are taken.

He considers that the problem is not limited to the National Authority for Tunnels alone, but is linked to a broader approach to economic planning based on implementing cost-intensive projects that depend on foreign currency, while their direct economic returns are delayed compared with productive projects such as ports and industrial zones that can generate revenues and job opportunities in shorter periods of time.

Meanwhile, MP Amira Saber Kandil, a member of the Senate, believes that evaluating the performance of the National Authority for Tunnels must start from its nature as a service authority, explaining that the main goal of public transport utilities is not to make profits but to provide a public service to citizens, and considering that achieving a financial surplus is positive if it happens, but it is not the main criterion for judging its performance.

She points to unexploited opportunities to boost revenues away from raising ticket prices, through expanding the investment of commercial assets belonging to transport utilities, such as spaces allocated to shops, restaurants, cafés and various services inside stations, in addition to advertising, explaining that many public transport networks in other countries rely heavily on these sources to generate additional revenues, and she believes that the use of these tools is still below the required level in Egypt.

She tells Zawia3: “Raising the prices of transport services has not necessarily been reflected in improving the quality of the service”, citing what she described as the decline in the level of maintenance on the metro’s first line, and stressing that improving the efficiency of operation and maintenance must go hand in hand with any increases in ticket prices.

Regarding borrowing policy, the MP stresses that the problem does not lie in borrowing itself, but in its volume and in the priorities for directing investments, pointing out that Egypt has, in her view, exceeded the safe limits of borrowing, while huge investments have been directed to projects that may not represent the top priority at the current stage.

She explains that infrastructure projects represent a basic pillar for supporting the economy, boosting investment, linking the governorates and improving transport, but that their evaluation must be based on the concept of “opportunity cost”; that is, comparing the economic and social return that could be achieved if the same resources were directed to other, more pressing or more impactful fields or projects, which she believes should be present when decisions are taken to expand cost-intensive transport projects.

Losses Keep Bleeding Despite Price Increases

Over the past 20 years, the prices of tickets for the metro run by the Authority have seen successive increases that peaked in 2026, but this has not stopped the bleeding of losses: since the metro’s opening on 27 September 1987, its operation relied on a nominal flat price of 10 piastres per ticket, and it then saw slight increases over two decades ranging between 25 and 75 piastres in 2002, reaching one pound in 2006 for any number of stations, from Helwan to El-Marg or via the second line, until March 2017, when it was decided to raise prices for the first time to two pounds, after which an entirely new phase of pricing based on the number of stations and zones began: in 2018 the Ministry of Transport divided metro stations into zones with different pricing, so prices rose to three pounds for 9 stations, five pounds for 16 stations, and seven pounds for 32 stations or more.

With the start of operation of the metro’s third line in June 2019, ticket prices in the first zone (9 stations) rose to EGP 5, in the second zone (16 stations) to EGP 7, and for anything beyond that to ten pounds, while the ticket for the first and second lines remained unchanged; then the increases followed one after another, so that in 2020 prices ranged between EGP 3 and EGP 7 for a first tier, and between EGP 5 and EGP 10 for a second tier, with increases of 40% to 67%.

In March 2022, the National Authority for Tunnels acquired 51% of the shares of the Egyptian Company for Metro Management and Operation; during 2024 the ministry raised the price of the metro ticket twice, the first in January, so that prices ranged between EGP 6 for a single zone and EGP 15 for more than 23 stations, and in August of the same year ticket prices increased to EGP 8 for a single zone and up to EGP 20 as the highest price, and in 2025 a new increase was applied according to the number of stations, reaching EGP 8 for up to 9 stations, EGP 10 for up to 16 stations, EGP 15 for up to 23 stations, and EGP 20 for the greater numbers of stations.

On 27 March last, the Ministry of Transport raised ticket prices for up to 9 stations to EGP 10 instead of 8, and increased the ticket price for up to 16 stations to EGP 12 instead of 10, while keeping the prices for the greater numbers of stations unchanged; the ministry stated in an official statement that metro ticket prices were being raised to EGP 10 for up to 9 stations instead of 8 (an increase of 25%), and EGP 12 for up to 16 stations instead of 10 (an increase of 20%), while keeping EGP 15 for up to 23 stations and EGP 20 for longer journeys.

According to press reports, the government seeks to raise an additional EGP 3 billion during the current 2026-2027 fiscal year, as the recent increases aim to generate additional revenues estimated at EGP 2 billion to reach EGP 12 billion, compared with EGP 9.5 billion in the last fiscal year; the revenues of the National Authority for Tunnels are also expected to rise by about an additional EGP 1 billion to record EGP 6.5 billion by the end of the year, compared with EGP 5 billion and 800 million in the previous fiscal year, in addition to raising the revenues of the sleeper car sector to about EGP 1.8 billion.

Steep Borrowing

Dr Karim El-Omda, professor of political economy, attributes the large gap between the revenues and expenditure of the National Authority for Tunnels to the chronic financial deficit it suffers from and to the policy of financing its projects through borrowing, explaining that the nature of its projects, as huge infrastructure projects, imposes high capital investment and large operating and maintenance costs, making it dependent on huge loans, often in foreign currency, to finance the construction of metro lines, electric trains and the monorail.

He explains that mass transport projects differ from commercial projects, as it is difficult for them to achieve direct financial profits because of their service nature: even with ticket prices raised, revenues remain insufficient to cover the costs of construction, operation and debt service, stating that the main return of these projects lies in the social return and the improvement of transport services for citizens, not in making financial profits, and noting that achieving a financial surplus will not be possible in the near term as long as the Authority continues to carry out extensive capital investments.

He tells Zawia3: “The Authority’s continued expansion in implementing new lines and projects by its nature leads to an increase in financial obligations and debts, while the economic and social returns of these projects appear in the long term, but stopping borrowing would necessarily lead to halting the implementation of new projects or the completion of the phases under way, which affects plans for expanding transport networks”.

Regarding the conversion of the National Authority for Tunnels into an economic authority in 2020, El-Omda explains that the aim of this conversion was to raise management efficiency, increase reliance on its own resources and give the Authority a greater degree of financial and administrative independence, including preparing feasibility studies and borrowing in its own name instead of relying directly on the general state budget.

However, he believes that this conversion did not change the essence of the financial crisis, because the Authority is still implementing huge government projects that need continuous financing, explaining that transferring the debt from the general budget to the Authority does not mean the disappearance of the financial obligations, as the state remains indirectly responsible for these debts, since the Authority is a government body.

He links the losses of a number of economic authorities operating in the transport sector, foremost among them Egyptian National Railways and the National Authority for Tunnels, to the high costs of construction, maintenance and operation and reliance on borrowing, but at the same time he stresses that management efficiency is an important factor that cannot be overlooked, calling for restructuring management and strengthening oversight of the performance of boards of directors and spending mechanisms, in a way that contributes to improving the efficiency of managing these utilities alongside addressing the financing challenges they face.

The professor of political economy believes that the concept of spending priorities remains relative, varying according to the regions and the groups that benefit, as the evaluation of any project is linked to the nature of its beneficiaries and its development objectives; he gives the example of the metro in Greater Cairo, which serves the largest population density and the main economic activity in the country, while the monorail contributes to linking the new cities to the capital and is considered one of the fast and environmentally friendly means of mass transport, whereas the residents of other governorates have different priorities.

At the same time, he points out that the government, when taking the decision to implement these projects, relies, as is supposed to be the case, on feasibility studies that determine development needs and the viability of the investment, considering that this vision can justify expansion in modern transport networks, even if it is the subject of public debate over the ordering of priorities.

For her part, the economic researcher Mai Kabil believes that the widening gap between the revenues and expenditure of the National Authority for Tunnels is linked to the rapid expansion in implementing huge transport projects without making clear feasibility studies available to public opinion or to parliament and researchers, whether in terms of their development priorities or in terms of cost and return, explaining that the state may resort to borrowing if a project achieves a large economic or developmental return, as in mass transport projects that serve millions of citizens, but that a number of the new projects, such as the high-speed electric train, still lack, in her view, published information that would allow the number of their beneficiaries and their viability to be assessed compared with other alternatives, such as upgrading the existing railway network.

She stresses to Zawia3 that the evaluation of public projects must be based on two basic criteria: economic feasibility and the priority of implementation given limited resources, considering that economics is based on choosing between unlimited needs and limited financial capabilities, which requires directing investments to the projects with the highest return and the most pressing need.

The researcher believes that converting the National Authority for Tunnels into an economic authority is not necessarily the most appropriate option, because its success depends on the purpose of managing it: if the purpose is developmental and service-oriented, it is natural for the state to bear part of the deficit as support for the service to citizens, but if the Authority is managed according to economic and commercial considerations, it is supposed to generate revenues that cover its expansions, which has not happened given the large expansion in projects that depend on borrowing.

She says: “The problem does not lie in the legal nature of the Authority so much as in the style of management and planning; the Authority did not achieve economic efficiency after its conversion, while government-guaranteed debts rose, which increased the burdens falling on the general budget”.

The economic researcher believes that the losses and debts borne by the Authority represent additional pressure on the general budget, because the resources allocated to covering these burdens reduce the state’s ability to spend on other sectors, adding that the state’s resort to borrowing to finance the budget deficit means that an increase in the losses of any sector leads to more borrowing, at a time when households bear the burden of rising prices for transport services without these increases succeeding in addressing the financial imbalances.

She stresses that the crisis fundamentally reflects a problem in management and planning priorities, calling for a reassessment of investment priorities in transport projects according to clear criteria of economic feasibility and development return, along with greater transparency about the reasons for choosing projects and the number of their beneficiaries, so as to ensure that public resources are directed to their most efficient use.

With the debts of the National Authority for Tunnels exceeding the two-trillion-pound barrier, and the gap between revenues and expenditure widening, the crisis appears to go beyond a passing financial deficit, raising a broader debate about spending priorities, the mechanisms for financing national projects and the future of economic authorities that provide public services that are difficult to subject to the logic of profitability.

Between voices supporting the completion of the projects as a developmental necessity and others calling for a rearrangement of priorities and a restructuring of the Authority, the most prominent challenge remains achieving a balance between developing the transport network and ensuring its financial sustainability.

☆ Add Zawia3 to your preferred sources on Google