The Ethiopian Railway Corporation (ERC) and Ministry of Transport (MoT) are drafting a regulation to set a tariff for the Ethio- Djibouti electric railway line that is rescheduled to start operations by January 2018.
After assessing the price for the rail transport, the joint technical committee that was formed by representatives from the two countries, proposed the price to the ministerial committee currently drafting a regulation for the tariff, according to a source close to the case.
Officials from the Corporation and the Ministry refrained from disclosing the tariff reasoning the pending drafting process of the legal framework.
To transport containers from Djibouti to Addis Abeba, on average private freight forwarders and logistics companies charge 110 Br a for a ton/Km while it costs 100 Br a ton/Km for bulk shipments. Data from the Ethiopian Shipping Logistics & Services Enterprise (ESLSE) states that the average transportation fee for goods from Djibouti to Addis is 120 Br for a ton/Km.
Globally it is affirmed that the price of trail transport is lower than air and road. The Addis Abeba Light Rail Transit charges passengers an average price of 35 cents a kilometre, while road transport in Addis costs 39 cents a kilometre.
Since its official inauguration held in January 2017 in the presence of Prime Minister Hailemariam Dessalegn and Ismail Omar Guelleh, president of Djibouti, the two countries rescheduled to launch service for no less than five times. But the launch was extended for various reasons including unfinished works and finalisation of legal frameworks and detailed operational documents.
But since September 20, 2017, the ERC has started heavy truck testing, ending the long-lasting light test of the rail.
Rail tracks that carry heavy materials such as stones went to Djibouti to test the capacity of the rails, according to Dereje Tefera, communications director of the ERC.
The railway is 756Km in length and extends from Sebeta to the Port of Djibouti. It covers 656Km in Ethiopia and has a length of 100Km in Djibouti including the 12Km that will link the Doraleh Multipurpose Port, Doraleh Container Terminal and Oil Terminal.
The railways were constructed for 4.2 billion dollars; a fund of which 70pc was secured from Export-Import (EX-IM) Bank of China, Ethiopia guaranteed Djibouti for the loan.
The project was constructed by the China Railway Engineering Corporation (CREC) and China Civil Engineering Construction Corporation (CCECC). The former constructed the 317Km segment from Sebeta to Mieso, and the latter built the 339Km line which extends from Mieso to Dawale, at the Djibouti border. CCECC built the remaining 100Km to the Red Sea, Port of Djibouti.
The railway is expected to cut the time it takes to travel from Djibouti to Addis Abeba from three days to 12 hours. The cargo trains can go to speeds of up to 120Km/hr and the passenger trains up to 160Km/hr.
The project is believed to improve the logistics industry of the country as 90pc of trade is transported through Djibouti. Ethiopia’s goods account 70pc of the total activity at Djibouti’s port.
China Railway Group Ltd (CREC) and China Civil Engineering Construction Corporation (CCECC) were contracted by Ethiopia and Djibouti to manage the rail for three to five years. The two companies will be paid 116 million dollars.
The regulation has to be sent to the Council of Ministers (CoM) and get approval before the commencement of the service, recently revised to the beginning of next year.
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