The ministerial committee formed to oversee the operations of the Ethio-Djibouti railway will meet before the end of this week to decide on who and how to cover the electric power supply cost for the railway that extends from Ethiopia to Djibouti.
Officials of Djibouti claimed they were not informed that Djibouti is expected to contribute its share in covering the electric power supply, according to a source close to the case.
The committee, which includes Abdisa Yadeta, state minister of Transport, and Mohammed Abdulkadir, Djibouti’s transport minister, met on July 21, 2017, at Sheraton Addis Hotel. The committee discussed the technical and legal framework of the railway system, when and how to launch the transportation service and detailed customs procedures and tariffs for the transportation. During the meeting, it was also discussed how to cover the cost of the electric power for the railway.
The Ethiopian officials asserted that Ethiopia would cover the cost of the energy for the railroad in the Ethiopian territory, while Djibouti has to cover the remaining power. The two countries did not have an agreement on the power cost coverage, according to the same source.
The railway has a 756km length and extends from Sebeta to the Port of Djibouti. It has a length of 100km in Djibouti.
The railway is expected to minimise the time it takes to travel from Djibouti to Addis Abeba from three days to 12 hours. The passenger trains can run up to 160km/hr and the cargo trains up to 120km/hr.
Inaugurated in October 2016, the project was constructed by the China Railway Engineering Corporation (CREC), which constructed the 317km segment from Sebeta to Mieso, and the China Civil Engineering Construction Corporation (CCECC), which built the 339km line from Mieso to Dawale, at the Djibouti border. CCECC also built the remaining 100km to the Red Sea, port of Djibouti.
The project was expected to commence operations last year but could not for various reasons including finalisation of legal frameworks and detailed operational documents.
The railways were constructed for 4.2 billion dollars; a fund of which 70pc was secured from EXIM Bank of China.
“They’ve requested to get additional power from Ethiopia for the railway project,” said Berhanu Beshah (PhD), chief executive officer (CEO) of the Ethiopian Railway Corporation (ERC).
“The country has a power shortage,” said Berhanu. “Djibouti has hot weather, and their power consumption is high. Therefore they asked us if they can get additional power from Ethiopia,” Berhanu told Fortune.
Djibouti imports electric power from Ethiopia. Between 2011 and 2016, the country imported a total of 1,635Gwh of energy from Ethiopia.
But according to the same source, the officials from Djibouti during the meeting claimed that they were expecting the Ethiopian government to cover the entire electric power cost.
For the next session, the two countries agreed to reach an agreement on the power supply for the project.
“The length of the rail in the two countries is known, and we have a tariff for the power,” said Berhanu.
Each station of the railway needs 25kv of power supply to move the trains and locomotives.
The project is believed to help the logistics industry of the country as 90pc of trade is transported through Djibouti, accounting for 70pc of the total activity at Djibouti’s port.
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