South African Firm May Manage Addis-Djibouti Railway

(HornTrade) – The Ethiopian Government has approved a South African-based company to operate the existing Addis Ababa-Ethiopia railway, but it has to be accepted by its Djiboutian counterpart, reports Capital. Another South African-based company, Comazar, had been negotiating with the governments of Ethiopian and Djibouti for a 25-year concession for the 781 kilometre track linking the Ethiopian capital to the country’s major port, but the agreement fell through after lengthy negotiations. The two governments were also discussing with the Kuwaiti Alghanim and Sons Group, however, the negotiations failed in 2008, according to the report.

Though the last two negotiations failed, the Ethiopia Government remained positive and has now finalised new negotiations with the South Africa-based company, the source said. The Ministry of Transport and Communication has approved the concession to this company, which has not yet been named, and directed it to try and secure Djibouti’s acceptance, the source said. The owners of the company are now in Djibouti, the source added.

The two governments have awarded Consta Joint Venture (JV), the Italian firm in 2006 to rehabilitate the old railway line. However, work was suspended because of the poor standard of the work reported by the project consultant.

After a meeting held last month at the Ministry of Finance and Economic Development (MoFED) involving EU, Ethiopian and Djiboutian officials, the project financier, and the Ethio-Djibouti Railway Enterprise, Consta was allowed to continue construction.

The European Union has lent 50 million Euros to rehabilitate 114 kilometres of the railway that sustained damage during the Ethio-Somalia war in the 1970s and from floods.

Source: Capital

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