Railways as a developing form of infrastructure in Egypt necessitated operations of sufficient capital to meet the high costs of initial construction and equipment purchases, especially because of the fact that Egypt had no history of relevant railway industries in the second half of the 19th century. From a macro-economic perspective, external capital investment drove the rail network towards rapid expansion; and conversely, when capital depleted, the railway system fell into a series of structural difficulties and sought new sources of investments. Railways in Egypt, from the very beginning, relied almost exclusively on khedival government’s expenditures. Therefore, on the eve of the government bankruptcy, the colonial institutions of the Caisse de la Debt Publique and the railway administration transformed the state-owned railway into a venture that generated a steady return of profits for the fundamental purpose of repaying Egypt’s public debts. This chapter reviews how Cromer’s “machinery of government,” ironically by using government institutions and regulations, enforced a self-alleged liberal template of the railway economy, including a balanced budget and privatization, yet ultimately centralized administrative control over the railway’s finances for the benefit of European creditors. The article also reveals the double-dimensional impacts that resulted from the foreign intervention of the railway economy. On the one hand, the state-owned railway was restricted by a rigorous expenditure cap that forestalled the system’s development, including new line construction, equipment upgrade, and localization of technical knowledge. Although the state railway pushed towards more frequent traffic at full capacity, providing fare reduction for passengers and freight, and appeared on the surface to be prosperous in total revenue under the colonial administration, it was unable to keep up with the newest global trends of railway technology and to meet the growing demands from its local population. On the other hand, the stagnancy in the railway’s public sector provided full opportunities for European business magnates, who invested in the emerging transportation systems of urban tramways and agricultural railways. Their assets and influence, as will be discussed in the following chapters, raised competing visions and concerns within diverse groups in the Egyptian populace, who grew increasingly aware of their country’s colonial status.