Ethiopia and Djibouti establish joint company to manage Chinese railway

Ethiopia and Djibouti have entered an agreement which will see them establish a joint company which will manage the newly built Ethio-Djibouti railway.

The 750-km railway line linking Ethiopia’s capital, Addis Ababa and Red Sea state of Djibouti was formally inaugurated in October this year. The Chinese built project was aimed at creating new manufacturing industries, improving transport and further opening up landlocked Ethiopia.

Ethiopia’s Minister of Transport, Ahmed Shide and his Djiboutian counterpart, Mohammed Abdulkadir Musa, signed the agreement after a negotiation that took more than a year, the state affiliated FANA broadcasting corporate reported.

The agreement will help ease transportation as was envisaged at the launch of the railway line linking both countries. The company will be headquartered in Addis Ababa, and will have the responsibility to provide passengers, freight and maintenance services for the route, according to the agreement.

The new railway line it was estimated will slash the journey time between the two countries to under 10 hours. Ethiopia is seeking to have 5,000 km of new lines working across the country by 2020.

The electrified and environmentally friendly project will also replace a diesel-powered Addis Ababa-Djibouti line.

“It is a part of trans-African railway network so it will give an opportunity for connecting Ethiopia with another neighbouring countries and it will minimize the cost of the transport and transport time and it is free from pollution, it uses renewable energy and so on,” Ethiopian Railways Corporation (ERC) communications manager, Dereje Tefera said in October.

The ERC official said the close to 4 billion US dollar project was 70 percent financed by Chinese EXIM Bank with the remaining 30 percent financed by the Ethiopian government. The construction was handled in two parts by China Railway Engineering Corporation (CREC) and China Civil Engineering Construction (CCECC).