Second Chinese company signs up for Ethio-Djibouti rail route

China Civil Engineering Construction Cooperation (CCECC) signed an agreement on Friday for the construction of the second half of the new Ethiopian – Djibouti rail route.

The Company will be responsible for the construction of 339 kilometer railway line extending from Meiso town via Dire Dawa city to Dewele town, Djibouti border.

It is to be recalled that another Chinese company, China Railway, had signed an agreement last October for the construction the first half this route; i.e., from Sebeta town (near the Capital Addis Ababa) to Meiso town.

The 659 km long new Ethiopian – Djibouti rail route is one of the eight mail routes included the nation’s plan to build about 5,000 km long railway lines that will connect about 49 towns, under the purview of the newly established Ethiopian Railway Corporation. (See the map and list of the routes, in this blog, – HERE and HERE). The plan is in addition to the country’s sole existing railroad that links Addis Ababa, via Dire Dawa, to the port of Djibouti, which was built by French in the early 1900s and owned by Ethio-Djibouti Railway Company. That railroad is being maintained by a European company currently.

Though Indian Prime Minister pledged last May to loan 300 million USD for the construction of the new Ethiopian – Djibouti railway, it appears that that is no more the case. As Indian loan is often tied with the precondition that her companies provide the goods and services needed, it is unlikely that Indian loan will be extended for a work by Chinese contractors.

China Civil Engineering Construction Cooperation (CCECC) is expected to complete the work in the next three and half years.

During the signing of the agreement with CCECC president Yuan Li, General Manager of the Ethiopian Railway Corporation, Dr. Eng. Getachew Betru, said that ‘Ethiopian and Chinese governments will be covering the construction cost of the projects’, according to the news from Ethiopian News Agency (ENA).

On the other hand, Bloomberg’s correspondent in Addis Ababa, William Davison quoted the General Managed as saying that ‘China Civil Engineering is expected to secure financing for about 40 percent of the costs’.

The cost of the project is estimated about 1.12 Billion USD – about 3.3 million USD per kilometer.

CCECC describes its business scope as ranging ‘from international contracting for railway construction to civil engineering design & consultancy, real estate development, trading, industrial investment and hotel management.’

CCECC’s website claims that:

‘The business activities of CCECC have spread over 40 countries and regions where more than 20 overseas offices or subsidiaries have been established. With its excellent performance and high quality in services, CCECC has been listed among the world top 225 international contractors for many years by the Engineering News Record.’

‘CCECC hit the highest contract value for three consecutive times in the history of international contracting by Chinese contractors, namely the Turkish Ankara-Istanbul Railway Rehabilitation Project (1.27b USD), the Algerian East-West Highway Project (5.75b USD) and the Nigerian Railway Modernization Project (8.3b USD).’

In a related news, the Ethiopian Railway Corporation indicated that ‘it has undertaken designs and aerial survey of 5,060 km of railway to be constructed’ across the country.

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Previous post: China to build the new Ethio-Djibouti rail route – and India? (Oct. 26, 2011)

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Daniel Berhane

Daniel Berhane

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