The Egyptian Railways Authority signed a contract with an international company to install the most advanced system of communications and electric signals in the Cairo-Alexandria line, the cabinet said on Sunday.
The project will also include building a central control tower to coordinate train traffic.
The World Bank will fund the project with 938 million Egyptian pounds, the cabinet said in a statement.
The national railway authority also signed an agreement to have a specialised European company supervise the implementation of the project.
The Egyptian government is facing criticism for failing to offer a plan to develop the transportation sector in spite of numerous train accidents, the worst of which left 50 schoolchildren dead last November.
Prime Minister Hisham Kandil and Transportation Minister Hatem Abdel Latif attended the contract signing of both agreements in Cairo.
This step comes as part of the government’s plan to develop the infrastructure of railway lines and increase safety factors to provide a better service to citizens.
Implementing the whole project will take up to four years, the statement reported.
France’s and Germany’s ambassadors to Egypt attended the contract signing as well.
France has helped in funding preliminary studies for the Cairo-Alexandria project with $650 thousand, the French embassy said in a statement.