In front of the ticket window at the Anwar El-Sadat metro station in downtown Cairo, a man in his sixties stood confused, doing many calculations, then gave up, despair covering his features. He held out ten pounds to the clerk, asking for a ticket to Tora El-Balad station, near the Helwan district in southern Cairo.
Mohamed El-Saeed (63) earns a monthly salary of EGP 4,000 for working as a security guard for more than ten hours a day at a company in downtown Cairo, after retiring years ago, having worked all his life as an administrative employee at a public sector company in the Helwan area, in the hope of covering the costs of a life he describes as having become extremely difficult.
El-Saeed, as he tells Zawia3, is trying to cover the family’s expenses, especially since his fourth daughter is not yet married, and he hopes the days will give him a chance to provide what she needs for her marriage. But rising prices pursue him and crush him: he has to pay more than a quarter of his monthly salary on transport alone, for the metro and another ride to his home, whether a microbus or a tuk-tuk.
Things are not much different for Marwa (26), who faces a daily ordeal covering the costs of her commute from her home on Faisal Street in Giza Governorate to the Abbas El-Akkad area, where she works as a saleswoman in a clothing shop for more than 11 hours for EGP 3,500. She finds herself forced to spend more than 25% of her salary on transport, especially after prices rose.
She says: “I have to take at least three means of transport: first a microbus or tuk-tuk from my home to the main Faisal Street, then another to the Abdel Moneim Riad terminal in Tahrir Square in central Cairo, and from there to the start of Abbas Street in Nasr City. I pay more than EGP 60 a day just for transport, not counting breakfast or lunch, and despite my attempts to manage my expenses, the situation has become tragic.”
In the past few weeks, Egypt has seen government decisions to raise fuel prices, which directly affected the operating costs of public transport. In a related context, the Egyptian government announced increases in metro and train ticket prices at varying rates, starting this August.
The new increases in metro ticket prices covered all categories, as prices of short- and long-distance tickets rose at varying rates ranging between 17% and 33.3%. Ticket prices for people with disabilities also increased significantly, reaching five pounds. The government justified these increases by higher operating costs resulting from higher fuel prices. The authorities decided to raise the price of the nine-station ticket from EGP 6 to EGP 8, the 10 to 16 station ticket to EGP 10 instead of 8, the 17 to 23 station ticket to EGP 15 instead of EGP 12, and the ticket for more than 23 stations to EGP 20 instead of EGP 15.
Until 2016, metro tickets in Egypt did not exceed one pound; they rose to two pounds in 2017, and then increases followed one after another, reaching 20 times the original price in just seven years.
The increases did not stop at the metro, which covers most districts of Greater Cairo, but also included train tickets. The government decided to raise ticket prices for suburban trains and “Tahya Misr” trains by 25%. Prices of first- and second-class tickets on “Talgo” trains also rose at varying rates, and these increases come as part of official efforts to cover the rising costs of operating trains. According to the Egyptian National Railways: “It has been decided to raise the price of a first-class ticket on the ‘Talgo’ train by EGP 50, to EGP 275 instead of EGP 225, and the second-class ticket by EGP 25, to EGP 175 instead of EGP 150, for the Lower Egypt line.” Ticket prices on Spanish, French and VIP trains, as well as Russian air-conditioned and ventilated third-class trains, were raised by 12.5%.
The successive increases in fuel prices come within Cairo’s economic programme agreed with the International Monetary Fund, under which it committed to gradually reducing fuel subsidies. Prime Minister Mostafa Madbouly stressed that Egypt expects to continue raising petroleum product prices until the end of 2025, as part of “a series of economic reforms aimed at achieving financial stability and reducing the budget deficit”.
The Cairo government reviews fuel prices periodically every three months, since it began applying an automatic pricing mechanism to a number of petroleum products in 2019, following the liberalisation of their prices to gradually eliminate government subsidies for them.
The government has raised fuel prices since the International Monetary Fund expanded its loan programme for the country by USD 5 billion last March, bringing it to USD 8 billion instead of three, after an economic crisis that saw rising inflation and an acute shortage of foreign currency, while Cairo pledged to reduce fuel subsidies as part of its agreement with the Fund.
This fuel price increase is the second approved by the Egyptian government this year, 2024, and afterwards the International Monetary Fund announced last July its approval of the disbursement of a new tranche of USD 820 million to Egypt, under the extended loan programme signed in 2022 and expanded to USD 8 billion this year. This decision came after the IMF completed its review of the economic reforms Egypt is carrying out.
In this regard, IMF Deputy Managing Director Antoinette Sayeh stressed the importance of restoring energy prices to cost-recovery levels, including retail fuel prices, by the end of 2025. She explained that this measure is necessary to support a smooth energy supply to the population and reduce imbalances in the sector, helping to achieve financial stability for the Egyptian economy.
The Egyptian National Railways’ total revenues reached about EGP 12 billion by the end of 2023, compared with EGP 5 billion collected by the end of 2022. The increase is due to maximising the commercial exploitation of the facility more than before, as the authorities’ economic policies focus on investing all state assets and facilities in ways that increase their profits.
The Ministry of Transport Between Hopes of Development and the Burden of Loans
The volume of loans obtained by the transport sector rose by 41.2%, as loans increased from EGP 17.7 billion in 2018/2019 to more than EGP 25 billion in 2019/2020, according to the final accounts of the economic authorities. The transport sector’s borrowing is expected to rise to EGP 216.5 billion in the current fiscal year 2024/2025, an increase of EGP 198.8 billion, according to the circular on preparing the final accounts of the economic authorities for 2023-2024 published on the Ministry of Finance’s official website.
The Ministry of Transport is currently seeking a loan of EGP 150 billion to finance the projects of its affiliated authorities. According to a report issued by the International Monetary Fund last March, Egyptian banks lent government bodies USD 8 billion in foreign currency, which may pose credit risks.
The government had allocated nearly EGP 224 billion for the plan to develop the railway network, out of EGP 1.5 trillion allocated to all transport sectors in Egypt. This budget was directed to building new lines and doubling old lines at about EGP 73 billion, along with importing new locomotives and carriages at EGP 48 billion, developing train stations and level crossings on all lines at EGP 23 billion, and modernising electrical signalling systems at EGP 46 billion, according to official data issued in 2023.
Last June, the Egyptian House of Representatives approved a loan, under the name of a credit facility agreement between the Egyptian government and Spain, to import seven luxury sleeper trains from the Talgo company worth EUR 200 million.
A number of MPs rejected the loan, most prominently MP Abdel Moneim Emam, secretary of the Plan and Budget Committee, who opposed the policies of excessive borrowing and said before the plenary session of Parliament: “The sons of the Egyptian people who ride the train pay in pounds, while the authorities repay the loan in dollars, and since 2018 the official exchange rate has increased by about 200%,” rejecting the government’s justification that the interest on the loan is estimated at about 0.5% on a declining basis, in reference to the heavy burden placed on citizens by many loans and making them bear the consequences.
Emam tells Zawia3 that “the crisis relates to the mechanism the ministry follows in expanding borrowing, despite the existence of more beneficial alternatives for developing infrastructure”, pointing out that infrastructure in any country needs major projects, but the crisis here relates to relying only on loans without alternatives such as expanding foreign investment or international partnerships in development fields.
He adds: “The government could have been a guarantor of development projects rather than a borrower, by applying a financing system called (EPC+F), a system that guarantees mechanisms to support the state’s major projects, including transport and railway projects, without the need to expand borrowing.”
The member of the Egyptian House of Representatives notes that the borrowing policy the Ministry of Transport has pursued heavily in recent years is a “strategic mistake” that has greatly increased the burdens and pressures on the government, especially regarding providing foreign currency to meet loan payments.
He explains: “The high-speed train project, for example, was among the projects put forward by former transport minister Hisham Arafat for implementation through the (EPC+F) system, and an international alliance of 18 entities applied to implement the project with the government. Had it been implemented, it would certainly have eased the debt burden, but what happened was that the idea was cancelled and the work proceeded under the (EPC) system only.”
Engineering, procurement and construction contracts (EPC+F) are the most common form of contract used by the private sector to carry out construction work on large and complex infrastructure projects, especially energy projects. They involve the investor (contractor) implementing the project arranging private financing for it, with the owner (governments or developers) paying its value after the project is completed, similar to a turnkey system, in addition to governments guaranteeing the loans obtained for the projects.
On the impact of such measures on citizens, Emam says the measure of the government’s success is mainly linked to the standard of living of individuals in Egypt, pointing out that social classes in Egypt have collapsed in recent years and the middle classes have declined to what can be described as “fragile classes”, because of the wrong policies of Mostafa Madbouly’s government.
Daily Suffering
Sally Abdel Rahman (28), a lawyer, describes her journey from her home in Hadayek October city to her work in the Mohandessin area of Cairo as daily suffering, as she moves between three means of transport at a cost of no less than EGP 23, forcing her too to spend 25% of her salary, which does not exceed EGP 4,500, on commuting back and forth.
She says expenses increase day after day, with rising prices of water, electricity, transport and all goods. Although she lives with her mother in the social housing project, where she received an apartment allocated to low-income earners years ago, she feels a suffocating crisis due to rising prices, especially the prices of her mother’s medicines, while wages are low and good jobs and opportunities are scarce.
According to the 2017 population census, about 22 million households rely on public transport for their movement, out of a total of about 24 million households. The results of the 2018 Income, Expenditure and Consumption Survey issued by the Central Agency for Public Mobilization and Statistics revealed that transport accounts for 6.1% of Egyptian households’ total annual spending, ranking fourth in household spending (according to the official statistical survey from 1 October 2017 to 30 September 2018, more than a third of households’ annual spending goes on food and drink (37.1%), followed by housing at 18.6%, health services and care at 9.9%, and transport at 6.1%). Meanwhile, the average annual income of households reached about EGP 59,000 during the survey period.
Commenting, human rights lawyer Malek Adly, director of the Egyptian Center for Economic and Social Rights, tells us that the crisis relates centrally to the excessively low level of wages in Egypt, which makes citizens feel a heavy burden in providing their basic needs daily, including transport.
Adly explains that transport prices rise as a result of higher operating, fuel and spare parts costs, which applies to both private and public transport. Looking at transport prices in Egypt, they do not seem excessively high, but what makes citizens feel the great crisis is the low standard of living and low wages, as well as the failure to provide an appropriate and fair social protection umbrella for those unable to cope.
He adds: “The government is supposed to commit to a package of measures that guarantees social protection for the poor and low-income classes, in parallel with inflation and rising prices, but that does not happen. Even the assistance provided to the poor through social protection programmes in the past few years is meagre and not proportionate to the large price increases.”
The director of the Egyptian Center for Economic and Social Rights believes that the current government is stripping itself of its social character. He adds: “There are two doctrines in running states: the first says the government is obliged only to provide security, defence and judicial services to citizens, and whoever wants other services must pay for them. This is the doctrine under which the Cairo government currently operates.”
He continues: “When the government’s aim is only to achieve economic gains, it is natural for prices to jump to a level beyond citizens’ ability to cover, especially as the number of citizens below the poverty line is 30 million, which means the social responsibility packages the government provides are supposed to cover this number, but that does not happen.”
Adly denounces the high level of borrowing by the Ministry of Transport, but at the same time believes the problems facing the sector are many, old and successive, and no single person or government should bear all their consequences; solutions must be found. But the problem relates to the mechanism for dealing with the problems and making citizens bear a large part of them.
At the same time, the human rights lawyer criticises the focus on some new projects at the expense of employees and the efficiency of the old system, pointing out that a large number of employees at the Ministry of Transport receive meagre wages not exceeding EGP 1,500 a month, in violation of minimum wage decisions, while the old system also faces many problems. Meanwhile, the ministry embarks on many costly modern projects, making it appear to lack proper prioritisation of what matters most to citizens, who use traditional means of transport constantly.
The Egyptian government has approved successive increases in the minimum wage for state and private sector workers in recent years, the latest of which was last April (setting the minimum wage at EGP 6,000), but not all sectors, especially the private sector, appear to be committed to applying the decisions, which places citizens under additional hardship to cover their daily expenses and reach their workplaces, while they do not receive wages proportionate to the record rise in prices.
