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Ethiopia signs $1.5 Billion Rail Deal with Chinese Construction Company

Tigrai Online, June 25, 2012 (Full text)

Ethiopia signed a $1.5 billion agreement with state-run China Communications Construction Co. to build a railway
Ethiopia signed a $1.5 billion agreement with state-run China Communications Construction Co. to build a railway

Ethiopia signed a $1.5 billion agreement with state-run China Communications Construction Co. to build a railway to carry potash from mines being developed in the nation’s northeast.

The 360-kilometer (224-mile) line will transport passengers and freight along a route to neighboring Djibouti’s Tadjourah port, which is being built. It should be completed by July 2015, Ethiopia’s Foreign Ministry said in a statement posted on its website yesterday.

CCCC (1800), a Chinese government-owned transportation infrastructure company, will be “mobilizing substantial resources to guarantee completion of the project,” the ministry said, citing the company’s vice president, Zhou Yongheng.

Ethiopia, sub-Saharan Africa’s second-most populous nation, is in the middle of a five-year plan to modernize and upgrade its infrastructure and industries. The government last year signed two agreements with Chinese companies to build a 4,744-kilometer (2,948-mile) rail network to Djibouti.

Landlocked Ethiopia lost its access to the sea after Eritrea voted for independence in 1993. The new rail line will run between the cities of Mekele and Hara Gebaya.

Canada’s Allana Potash Corp. (AAA), Sainik Potash Plc of India, Ethiopian Potash Corp. (FED) and Melbourne-based BHP Billiton Ltd. are all developing projects to extract potash, a fertilizer ingredient, in the Afar region.

Updated

State railway development agency Ethiopian Railways Corp has signed contracts for the construction of a new railway network in the north of the country.

Planned to be completed within three years, the 1 435 km gauge lines are intended to support regional development by providing Ethiopia with a second outlet to the sea through the port of Tadjurah in Djibouti.

This will complement the moribund line from Addis Abeba to Djibouti, which is currently being replaced on a new alignment.

On June 26 ERC signed a US$17bn turnkey contract for Turkish firm Yapi Merkezi to build a new line running 389 km north from Awash to Weldiya/Hara Gebeya.

Four days earlier, China Communications Construction Co had signed a US$15bn contract to build a 260 km line running south from Mek'ele to Weldiya/Hara Gebeya.

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