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Ethiopia's New $4 Billion Railway Project completed


Construction of a Chinese-funded electric railway, linking Ethiopia’s capital along its main trading route to neighboring Djibouti, has been completed, providing the African nation with much-needed improved rail access to a seaport.

The $4 billion project, implemented by China Railway Engineering Corp. and China Civil Engineering Construction Corp. will be commissioned next month.

The government is pinning its hopes on the freight and passenger transportation project, which was started three years ago, to boost robust economic growth that has outstripped regional peers in recent years. The line should cut in half the travel time between Addis Ababa and Djibouti, said Ethiopia’s transport minister Workneh Gebeyehu.

“With an efficient railway, our economy will perform even better,” Mr. Gebeyehu said. “This project allows us to compete effectively with the rest of the world.”

The landlocked nation close to Africa’s Horn has closely followed China’s economic and political model, while maintaining strategic alliances with the West on security, particularly in Somalia where it is a major contributor of troops fighting al Qaeda affiliate al-Shabaab. And Chinese infrastructure investment has played an increasing role in Ethiopia and the broader East African region.

The completion of the project comes months after Ethiopia unveiled a $425 million Chinese-built light railway in Addis Ababa, the first such electrified light transit system in sub-Saharan Africa.

The Chinese-funded 1,870-megawatt Gibe III hydropower plant is expected to come on stream later this year and nearly double Ethiopia’s power-generating capacity, while in neighboring Kenya, a $3.8 billion China-led project to build a railway from the Port of Mombasa to Nairobi and on to other East African capitals is nearing completion, with commissioning expected before year-end.

The 700-kilometer (435-mile) Addis Ababa-Djibouti line is double track for 71 miles from the Ethiopian capital to the central coffee-growing hub of Adama, and from there it runs as a single-track line to the port of Djibouti. Ethiopia is Africa’s largest coffee producer, and is projected to produce at least 6.52 million bags in the 2015-16 season, according to the U.S. Department of Agriculture.

The rail link is part of Ethiopia’s largely Chinese-funded $28 billion ambitious growth plan to revamp its infrastructure by 2020, an expansion that includes building 5,000 kilometers of railway lines. But with Beijing struggling with slowing growth, China’s “willingness to provide financial assistance to other developing economies may soon wane,” said Jacques Nel, an analyst with NKC Africa Economics.

Poor infrastructure, from dilapidated roads to aging railway facilities, has for long been singled out as a major hindrance to Ethiopia’s economic growth. Last year, the country was forced to double wheat imports to ease shortages after the most severe El Niño-fueled drought in 50 years decimated crops. But grain deliveries were stuck for several months in Djibouti because of inadequate infrastructure, according to government officials.

Rapid economic expansion hasn’t been without conflict. Plans to expand the capital into nearby tribal farmlands have triggered mass protests since last year, resulting in the deaths of as many as 500 people, according to rights groups.

This was brought into focus recently when Ethiopian distance runner Feyisa Lilesa made a symbolic protest at the Olympic marathon in Brazil against his government’s crackdown on Oromos, the country’s largest tribe.

Driven by cash-crop fueled agriculture and a growing urban population, Ethiopia posted average economic growth of 9.8% a year during the first half of this decade.

Source: wsj.com


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