Chinese Company Begins Dire Dawa Port Construction


Negotiating the contract took almost a year




China Civil Engineering Corporation (CCEC) has begun construction on the expansion project of the Dire Dawa dry port, at a cost of 1.5 billion Br. The construction project is a supplementary agreement to the Ethio-Djibouti Railway Project.

The start of construction comes two months after the approval of the contract signed between the Ethiopian Shipping and Logistics Service Enterprise (ESLSE) and the Chinese company.

The Enterprise will build the project on 35ha of land received from the Dire Dawa City Administration. The project will involve the construction of a terminal, a warehouse, a three storey building, offices, railway lines and other facilities.

The construction will enable the Dire Dawa port to hold 10,000 containers, eight times the port’s current capacity.The negotiation of the contract took almost a year. Executives from ESLSE and Ethiopian Railway Corporation were representatives from the Ethiopian side.

“The original price of the project was very high, which forced us to take long time to try to minimize costs,” said Aklile Ketema, architecture engineering head of ESLSE.

Originally, the Chinese company offered a bid of 2.6 billion Br to construct the dry port.

Founded in 1979, CCECC is one of two Chinese companies that built the part of the Ethio-Djibouti railway project that extends from Mieso to Djibouti.

Currently, the China Railway Engineering Corporation is also constructing a railway line connecting Modjo Dry Port with Ethio-Djibouti Railway line, at a cost of over 822 million Br. The project has now reached close to 50pc completion.

Currently, there are eight dry ports in Ethiopia. Around 78pc of the containers coming in and out of the country are handled at the Modjo dry port.

Modjo dry port was the first dry port in the country, established seven years ago. It has a capacity of 14,500 containers. This is 10 times the current capacity of the Dire Dawa dry port, which is 313Km away from the port of Djibouti.

The new project is also part of the second edition of the growth and transformation plan, which aims to bring the total number of dry ports up to 35 in the next three years.

The Dire Dawa port was first constructed by the Ethio Djibouti Railways, which administered the Ethio-Djibouti railway. The port, however, has been rented to the Shipping Enterprise since 2013.

The expansion project, which has a target to reduce transit cost and time, is expected to save millions of dollars annually.

It is expected to be completed in the next 18 months. The construction of some of the terminals and a 1.5km railway line that connects the port with the Ethio-Djibouti railway line is scheduled to be finalised during the current fiscal year.

“Our plan is to complete the railway line and a few terminals parallel with the Ethio Djibouti Railway,” said Aklile.

The Ethio-Djibouti Railway would not be operational for at least the next three months, as it will take months to carry out the railway testing, a source at ERC told Fortune.

The pilot testing of the Addis Abeba Light Railway took around six months, three months later than it was originally planned.

Two months ago, ERC’s representatives told Parliament that it would take at least two more months to integrate the railway line with other infrastructural facilities, such as dry ports.

The lack of planning of the integration of the railway and the dry ports has become a source of inconvenience for freight forwarders.

“This should have been taken into account during the early planning of the project,” one forwarder said.

The Railway Corporation, however, believes that the integration can be done after the completion of the 752Km long railway line.

“Integrating the railway and the dry ports is easy and will not take time,” Dereje Tefera, communications director of the Corporation explained. “We worked on the main railway first to minimize cost.”



By SAMSON BERHANE
FORTUNE STAFF WRITER

Published on Mar 28,2017 [ Vol 17 ,No 882]


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