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Egyptian Parliament accuses Transportation Ministry of corruption on Talgo deal

The Egyptian Parliament accused the Ministry of Transportation of incompetence and corruption, during a hearing session on Monday.

The criticism came in light of France’s recent deal with global train manufacturing company, Talgo, which was allegedly cheaper and more effective compared to the agreement Egypt signed with the same company during December 2022, by which Egypt purchased 7 long distance trains with a speed of 160 Km\h, with a total cost of €280 million.

This came during a hearing session which included discussions about issues regarding ground, maritime and transportation, establishing new roads, in addition to developing railways and underground trains.

During the session, MPs criticized the Transport Minister on several topics, like misplacement of turbulence within roads, overlooking the establishment of essential roads in rural areas and building several adjacent roads at the expense of completing essential projects.

Responding to aforementioned claims, Minister Kamel El Wazir said that Egypt’s deal with Talgo is cheaper by 25 percent compared to the company’s deal with France, in addition to Egypt receiving an extra train as a gift as a part of the deal.

Moreover, he pointed out that Egypt secured 15 years of maintenance along with the deal, unlike France who only got one year of maintenance.

During the session, El-wazir affirmed that there is nothing to be afraid of, stating that his ministry is not a broker.

Details about the two deals on Talgo’s website confirm the numbers shared by the ministry of transportation regarding the Egyptian deal. However, the company has not yet disclosed any numbers about the French deal, or the years of maintenance included. 

Upon further research, all claims about the new French deal signed in January 2023 are based on speculations, as no official sources from Talgo or the French government revealed the actual cost. 

In a recent TV interview on January 22, the Minister claimed that Talgo, in a previous deal with Egypt in 2019, reduced $15 million of the deal’s total cost “in appreciation for president Abd El Fattah El Sisi and due to their strong desire to invest in Egypt”

According to the Minister, the company dropped its initial cost from $141 million (€125 million) to $126 million (€112.5 million)  –  the cost originally proposed by the Egyptian government- 

Details about the deal found on Talgo’s website contradict the Minister’s claims, as the total cost of the deal – involving six long distance trains – is €158 million. 

A local news website reached out to an official source from the Ministry of Transportation, inquiring about the conflicting numbers and whether there was a change in the deal’s final cost, which wasn’t documented by the company’s website.

According to the source, the cost mentioned by Talgo;s website is accurate. The total cost of €158 million is divided into €126 million for the six trains, in addition to two years of maintenance, and €32 million for 6 more years of maintenance, granting Egypt a total of eight years of maintenance along with the trains.

The source revealed that when negotiating the deal, the supreme committee for the deal deemed the initial cost proposed by Talgo – €163 million – as too high, and shared their concerns with the Minister, who later contacted the company to negotiate the price.

As a conclusion, it appears that the total discount offered by Talgo for the deal was only €5 million, from €163 million to €158 million.

However, this discount was only offered to prompt the Egyptian government to sign another agreement with Talgo for a new set of trains, which took place in December 2022, according to the source.

Furthermore, when asked about the gift train mentioned by the minister as a part of Egypt’s deal with Talgo, the source revealed that due to company’s inability to import trains to Egypt during the pandemic, the company offered Egypt a gift train as an apology, denying that it was a part of the original deal.

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