Ethiopia Opens Tender for 392-Km Railway Project

15/01/2025 251 Ethiopia, TENDER CALENDAR, TENDERS, AFRICA, WORLD, RAILWAY, GENERAL

Ethiopia has launched a new tender to continue construction of a 392-kilometer railway line connecting the country’s eastern and northern economic zones. The project, which began in 2015, was halted in 2020 due to armed conflict. Now, international bidders are being offered the opportunity to complete the project.

Importance and Scope of Railways

The new railway line aims to increase economic integration by strengthening Ethiopia’s interregional transportation. The project will be integrated with the Mekelle-Tajura and Addis Ababa-Djibouti lines, expanding the country’s transportation network and accelerating interregional trade.

The project was initially undertaken by a Turkish contracting company Building Center was launched in partnership with. 1,7 billion dollar The project, which started construction with a budget, was financed by Turkish Exim Bank and Credit Suisse.

Developments After the Project Halt

  • Impact of Armed Conflict: In 2020, construction was stopped and the project was suspended due to armed conflict in Ethiopia.
  • Yapı Merkezi's Compensation Claims: The Turkish contractor company requested $500 million in damages, while the Ethiopian Railways Corporation (ERC) requested $1,6 billion in compensation.
  • International Arbitration Process: The dispute between the parties is being examined by the London Court of International Arbitration and the final decision will be announced in the coming weeks.

Ethiopia's Future Plans

Ethiopia is looking for a new contractor and source of financing to complete its railway project. By implementing this strategic project, the government will:

  1. Strengthening Economic Linkages: It aims to accelerate trade and logistics by connecting the eastern and northern regions.
  2. Regional Cooperation: International connections will be strengthened by ensuring integration with the Addis Ababa-Djibouti line.
  3. Infrastructure Investments: It aims to contribute to the economic growth of the country with its modern transportation networks.

This project highlights the importance of regional and global partnerships in Ethiopia’s infrastructure goals. The resumption of construction could provide significant momentum for both domestic economic activity and trade with neighboring countries.