- A Dubai-based company, which already has great interests in the Djibouti port, is eying possibilities to invest into the rehabilitation of the Ethio-Djibouti railway, connecting Addis Ababa with Djibouti and representing landlocked Ethiopia's main import-export lifeline.
According to reports by the Ethiopian newspaper 'Addis Fortune', DP World, a Dubai state-owned company, "has shown a strong interest to enter into the Ethiopian market, eyeing a potential for investment in rehabilitating the Ethio-Djibouti railway line and developing a green project of installing a pipe line for oil, from Djibouti," the newspaper reports.
According to the Dubai company, "Ethiopia is natural hinterland of Djibouti Port," making investments in Ethiopia's infrastructure an obvious option for DP World. The company has been strongly involved in the Djibouti port - the main port in the Horn region and Djibouti's main source of revenues - since year 2000, where it operates terminals treating container shipments and co-manages the entire port in cooperation with port authorities. The main part of shipments passing through Djibouti port goes to or from Ethiopia.
Sultan Ahmed Bin-Suleiman, chairman of DP-World, led a group of 11 company representatives on a recent visit to Addis Ababa, where the team mapped business possibilities in Ethiopia and met with Prime Minister Meles Zenawi. According to 'Addis Fortune', multimillionaire Djiboutian businessman Abdurahiman Boure and the chairman of the Djibouti Port Authority accompanied Mr Bin-Suleiman.
The delegation reportedly told PM Meles that the company was interested in getting management concessions to operate the 761-kilometer Ethio-Djibouti railway line, and to install a pipeline that runs from Djibouti to Awash area. "It has also requested to be involved in hotel and tourism business," The Addis newspaper reported. Investments in the range of US$ 1 billion were reportedly suggested, with PM Meles signalling the Ethiopian government's interest.
The key rail connection to Djibouti port was built by the Imperial Railway Company of Ethiopia, founded in 1894, and was opened in 1917. France owed the Djibouti part of the line, but transferred this ownership to the Djiboutian government after independence in 1977. Later, ownership of the entire railway was transferred to the Ethio-Djibouti Railways company.
Since the 1970s, the railway's quality has been deteriorating and its importance diminished as more and more of transported goods and passengers went over to improved roads. Also, the port of Massawa gained importance. With Eritrea's independence in 1993, Ethiopia became landlocked, and with deteriorating relations between the two countries, Massawa became out of reach for Ethiopia and Djibouti's importance again became key.
In 2003 the European Commission prepared a grant of euro 40 million for the rehabilitation of the railway. The Djiboutian and Ethiopian governments chose the South African company Comazar to administer the railway in March, 2006. A 25-year concession was due to be signed in June 2007, but this failed to happen, and negotiations began with Kuwaiti company Fouad Alghanim and Sons Group.
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