OFFICIAL GC DOCUMENTS EGYPTIAN NATIONAL RAILWAYS Revised Supplemental Letter No.2 September 24, 2014 International Bank for Reconstruction and Development 1818 H Street, NW Washington, DC 20433 United States of America Re: Loan No. 7656-EG (Egypt National Railways Restructuring Project) (Original Project) and Loan No. 7982-EG (Additional Financing for the Egypt National Railways Restructuring Project) (Additional Project) Revised Performance Monitoring Indicators Dear Sirs and Mesdames: We refer to the Loan Agreement dated August 2, 2009 (the Loan Agreement) between the Arab Republic of Egypt (the Borrower) and the International Bank for Reconstruction and Development (the Bank) and the Project Agreement of the same date, between the Bank and the Egyptian National Railways (the Project Implementing Entity) both for the Egypt National Railways Restructuring Project (Original Project); and the Loan Agreement dated September 23, 2011 (the Additional Financing Loan Agreement) between the Borrower and the Bank and the Project Agreement of the same date, between the Bank and the Project Implementing Entity both for the Additional Financing for the Egypt National Railways Restructuring Project (Additional Project). We confirm to the Bank that, for purposes of paragraph A of Section II.A of the Schedule to the Project Agreement of the Original Project and paragraph A of Section II.A of the Schedule to the Project Agreement of the Additional Project, the revised indicators set out in the attachment to this letter shall serve as a basis to monitor and evaluate the progress of the Original Project and Additional Project and the achievement of the objectives thereof. This letter shall supersede the Supplemental Letter No. 2 dated August 2, 2009 provided by the Project Implementing Entity to the Bank. It is our understanding that, in making the Loan for the Original Project and the Additional Project, the Bank relies on the statements set forth or referred to in this letter. Very rs EGYPTIAN N AL RAILWAYS xmw xAmed eopreet ativk- Authorized Representative ' Attachment to Supplemental Letter No.2 EGYPT: National Railways Restructuring Project Revised Project Results Framework and monitoring indicators Baseline Target Values Respons Original Progress ibility PDO Level Results Indicators o Unit of Measurement t To Date Frequency a u for Data Comment Start Frequency F16 F18 Methodology Collecti FYO7/FYO8 15 17 19 /FYO9 on Once every ENR statistics ENR Defined as the number two years of daily available locomotives divided 1. Availability ratto of the useful fleet Percentage. by the total number of assigned locomotives IJ11 for each SBU averaged o Long Distance Passenger 49.5 75 73 76 80 on a yearly basis. o Short Distance Passenger 74.5 74 79 80 80 Target values are o Freight 15.3 49 71 75 77 yearly and not cumulative Once every ENR statistics ENR Total number of kmn two years (000s) run by all locos 2 Kilometrage per available Kilometer (000s) dunng a year divided locomttve.by the average number locomotive.of yearly available o Long Distance Passenger O143 184 156 166 176 locos o Short Distance Passenger 68 71 83 90 97 Target values are " Freight 75 87 62 72 85 yearly and not cumulative 3 Long dtstance Passenger traffic on Number (millton) Once every ENR statistics ENR Total annual Cairo - Alexandria two years passenger-kmn S AC trains 855 1267 1755 1830 1907 (millionl " non-AC long d6stance trains 1323 1078 2304 2402 2503 Target values are yearly and not cumulative 4 Long distance Passenger traffic on Number (million) Once every ENR statistics ENR Total annual Beni Suef - Asyut two years passenger-kin o AC trains 2245 2397 2948 3073 3204 (million). o non-AC long distance trains 34239 3817 4550 4742 4944 Target values are yearly and not cumulative 4. Average number of fataltties due to Number Once every ENR statistics ENR Target values are railway acctdents on the ENR network' two years yearly and not cumulative o Typical accidents2 O 0.0248 0 15 o Non Typical accidents' 0.57 1.03 o Total' 0.595 1.18 0.31 0.30 0.30 'Calculated as the total annual number of victims on ENR network per one billion passenger-km. ENR shall develop an internal system for collecting data concernmg the number of fatalities (persons killed tn the accident and deceased after the accident) Figures about the total annual number of fatalities and the total volume of passenger-km will be presented for the annual evaluation of the indicator. 2 Accidents produced as a consequence of railways malfunctioning or railway staff human error. Other accidents involving railways (level crossing accidents ignoring the signaling warnings, people's negligence in the railway area, etc 4Only the total (sum of typical and non-typical accidents) is monitored for assessing railways safety. Intermediate Results and Indicators Respons Baseline DaaSuc/ ibiliz Original Progress Target Values Frequency Mat horlog for Data Comment Project PrgesMtoooy Collecti Intermediate Results Indicators Unit of Measurement Start To Date on FYO7/FYOS FYI2/13 FY14/ FY161 FYI81 /FYO9 15 17 19 Component I I Punctuality of AC trains on the line Number Once every ENR statistics ENR Total number of AC Cairo-Alexandria 0.29 057 0.18 0 13 0.07 two years train arriving 15 minutes to final destination late during one year divided by the total number of AC trains operated in the same period of time. The formula for calculation of punctuality shall exclude the trains delayed or cancelled due to factors affecting the punctuality which are beyond the control of ENR (social unrest affecting the railway traffic). Target values are yearly and not cumulative 2. Punctuality of AC trains on the line Bent Number Once every ENR statistics ENR Same as above Suef- Asyut O 042 070 0.23 0.16 0.09 two years 3 Installation of a modernized signaling Yes/No No No No No Yes Every year ENR statistics ENR system on Cairo-Alexandria line completed and operating 24/7 4 Installation of a modernized signaling Yes/No No No No No Yes Every year ENR statistics ENR system on Bent Suef-Asyut line completed and operating 24/7 5 Completion of studies to prepare the next Yes/No No No No No Yes Every year ENR statistics ENR phase of the modermization of the signaling system (ETCS level 1) Component 2 6. Number of kilometers of renewed tracks Kilometer Every year ENR statistics ENR along the Cairo-Aswan and Benha-Port 0 80 150 260 260 Said lines 7. Maintenance costs on sections where Number (Million EGP') Once every ENR statistics ENR Target values are tracks are renewed annual total cost of 2.77 3.29 2 12 0.94 054 two years yearly and not track infrastructure maintenance on cumulative sections renewed under the project Component 3 8 Average management training time ratio Number Once every ENR statistics ENR Target values are between the number of staff-days 29 17 10 12 12 two years yearly and not allocated for training during a year and O the average number of management staff at ENR'. 9 Completion of studies to support the Yes/No No No No No Yes Every year ENR statistics ENR restructuring of ENR [U Five year rolling average of the cost of mechanical maintenance and materials' cost for the Project sections. ENR categories of staff considered as management staff are first six levels of management