Six years after the Ethio Djibouti Railway began operating, the Chinese Railway Construction Company (CRCC) officially handed over its management responsibilities to the governments of Ethiopia and Djibouti. The handover ceremony was held in Addis Ababa, on Friday.
Ethiopia, being a land locked country, has been fully dependent on Djibouti’s ports for its imports and exports. Ethiopia Djibouti highway and Ethiopia Djibouti Railway connect the two countries.
Construction of the Ethio Djibouti electric rail link began in 2011 by two Chinese government-owned companies, China Railway Group Limited and China Civil Engineering Construction Corporation.
Chinese Railway Construction Company (CRCC) has been managing the railway since it started service in 2018. The Ethi Djibouti Electric Railway line is over 750 kilometers long. This electric train line goes from Addis Ababa to Djibouti port. It is the first electric train line built in Africa.
The Ethio Djibouti Railway is a big project built under Chinese the Belt and Road Initiative. This initiative is a giant infrastructure strategy launched by China in 2013. Goal is to improve connections between Asia, Africa, and Europe by land and sea to to facilitate cross border trade and regional economic integration.
Freight trains started running in November 2015. Then, passenger trains were launched on Ethiopian part of the railway in October 2016, with passenger service finally launching in Djibouti in January 2018. The entire project cost a huge $4 billion.
Building the part of the railway that goes through Ethiopia costs $3.4 billion. To pay for this, China loaned Ethiopia 70% of the money, with Ethiopia covering the remaining 30%. Djibouti contributed $878 million for their section of the railway.
Last year, Abiy Ahmed the Ethiopian PM, announced to diversify Ethiopian use of ports. Ethiopia is in talks with Somaliland and Kenya to use ports there. Kenya reportedly is offering reduced tariffs to Ethiopia in case of Ethiopia using Kenyan Lamu port.
Somaliland and Ethiopia signed a controversial MoU in January this year. The MoU, if implemented, would give Ethiopia access to sea through Somaliland. Ethiopia would be able to build a naval base in Somaliland. In return, according to Somaliland authorities, Ethiopia would recognize Somaliland as a country and Somaliland would acquire shares in a profitable Ethiopian entity. Somalia is opposing the MoU calling it a violation of Somalia’s sovereignty and territorial integrity. Read More…
It seems that in coming years, Ethiopia Djibouti railway and Ethiopia Djibouti highway would transport less cargo as Ethiopia is set to use other foreign ports too.
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