CAIRO– Egypt signed a deal worth more than one billion euros (about 1.2 billion U.S. dollars) with a Russian-Hungarian rail consortium to import 1,300 passenger cars for the Egyptian railway authority, the Egyptian cabinet said in a statement.

“It is the largest deal in the history of the Egyptian railways,” the statement said.

The supply contract was signed by Ashraf Raslan, Chairman of Egyptian National Railways (ENR) and Sergo-Shakhzada M. Kurbanov, Vice-President of Transmashholding who represents Transmashholding-Hungary, the Russian-Hungarian consortium.

The signing ceremony was attended by Egyptian Prime Minister Mostafa Madbouly and Transport Minister Hesham Arafat, as well as the ambassadors of both Russia and Hungary.

The Egyptian transport minister said in a press conference following the ceremony that the contract is worth of 22 billion Egyptian pounds (about 1.2 billion U.S. dollars), noting that it includes 800 cars with air conditioning and 500 with forced ventilation.

Raslan announced in April a project to renovate the country’s old railway system by 2022, with a total cost of 55 billion Egyptian pounds (about 3.1 billion U.S. dollars).

The ENR chief said on Tuesday that the deal “will contribute to improving the operating efficiency of Egypt’s railways, especially with the current aging fleet of passenger cars.”

Raslan pointed out that most passenger cars in Egypt’s trains are over 40 years old with frequent breakdowns and high cost of operation and maintenance.

Transmashholding said on its official website that the project is supported by the governments of Egypt, Hungary and Russia.

“The parties positively look at the growth of international cooperation and are confident that further improvement of trade and industrial relationships will make a solid platform for even more ambitious projects in the future,” Transmashholding said.

It noted that the contract was awarded to the consortium following a bid called by ENR in 2017.

“The overall cost of the rolling stock to be produced and delivered under the contract exceeds one billion euros,” said the company, adding that “the supply contract duration is five years since the date of its execution.”

Egypt’s suffers a high rate of train accidents that killed and injured hundreds of passengers over the past few years.

Egyptian President Abdel-Fattah al-Sisi said earlier this year that the country needed from 200 to 250 billion pounds (up to 14 billion U.S. dollars) for a comprehensive upgrade of the railway network, but the amount was not available due to difficult economic conditions.