July 6 , 2019
By TEMESGEN MULUGETA( FORTUNE STAFF WRITER )
The government is considering the construction of a 1,512Km standard gauge railway line that will connect Ethiopia with Sudan.
To determine the feasibility of the project, the Ethiopian Railways Corporation has tendered a request for proposal looking for a company to conduct a study on the project, requesting the submission of financial and technical offers.
Approximately 594Km of the railway line will run through Ethiopia starting in Addis Abeba, travelling through Weldia, Wereta, Gonder and Metema and then across the Sudan boarder. The remaining 918Km line will connect Metema with the Port of Sudan running through Galabat-Gadarif-Kassala and Haiya towns in Sudan. Two percent of Ethiopia’s cargo is ferried through Port Sudan.
Expected to begin in four to five months, the overall process of the feasibility study is planned to be completed within 20 months, while the construction of the railway line is expected to take up to four and a half years.
The African Development Bank, a financial institution comprising 54 African countries and dedicated to promoting economic and social progress in the continent through loans, equity investments and technical assistance, will finance the study.
The Bank has allocated an estimated 3.2 million dollars for the study. It will disburse the funds under two components: for the preparation of a complete feasibility study and to cover regional validation workshops to build consensus, review and approve the study outputs.
The project will present a strong case for economic development in the Horn of Africa by reducing the costs of doing business by facilitating the movement of persons and goods, providing infrastructure to transport goods and services supporting trade, industrialisation and regional integration, according to Abdul B. Kamara, (PhD), country manager of the African Development Bank Group.
“The role of the Bank in the feasibility study is in monitoring the implementation of the project through supervisory missions and quarterly progress reports submitted by the Corporation,” said Abdul.
The winning consultancy firm will assess the engineering services, cost estimates, railway operation analysis, environmental and social impact analysis, economic and financial analyses, economic evaluation and sensitivity analysis and private sector participation.
Engineers in the railway industry estimated the total cost of the project to be nine billion dollars. The 656Km railway that connects Ethiopia with the port of Djibouti cost the two countries 4.2 billion dollars.
Inaugurated in October 2017, the Ethio-Djibouti railway was constructed by China Railway Group Ltd and China Civil Engineering Construction Corporation after the two countries secured 70pc of the financing from the Export-Import (EX-IM) Bank of China.
An expert in the railway industry believes that the project could not be realised, due to the current debt level of Ethiopia.
“The Corporation has to take a lesson from the ongoing railway projects,” he adds.
Weldiya-Hara Gebeya-Mekelle railway project that covers 216Km has been under construction by China Communications Construction Company at the cost of 1.5 billion dollars. After construction of the project reached 56pc completion, construction was halted due to financial problems.
Tesfaye Melaku, a lecturer in the economics department at Bahir Dar University, believes that the project will not be realised, since the government has announced it does not have a plan to start new mega projects until it is finished with those already begun.
“Securing financing in the current economic situation of the country is a major challenge,” said Tesfaye.
The government should work on solving electric power shortages before planning to build a new railway line that operates by electrical power, according to Tesfaye.
Dereje Tefera, communications director of the Ethiopian Railway Corporation, declined to comment on the issue.
PUBLISHED ON Jul 06,2019 [ VOL 20 , NO 1001]
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