Ethiopia, Djibouti look for strategic partners for Railway

By Tamiru Geda
 

The governments of Ethiopia and Djibouti are seeking potential investors and strategic partners for the development of the Chemin De Fer Djibouto -Ethiopien (CDE).
At a launching ceremony organized for the invitation for the expression of interest to bid for the concession of the operation and management of the railway that was held on Tuesday April 6, 2004 at the Hilton hotel, State Minister of Infrastructure, Ato Haile Assegide told the invited foreign and local investors that the two governments are looking for a strategic partner who would agree to a 25-year contract that would be renewable every 3 years .
According to Haile the CDE may have some problems as is common in most government run railways, but he insists that the future of the CDE is bright indeed. In his view the growing economic relation between the two neighboring countries, their investment policies, the improvement of the Port of Djibouti, the implementation of the current EU financed rehabilitation program and the import –export traffic potential, are among the factors that are indicators of the importance of the railway. “We need a strategic partner and not a just business partner” said Haile .
Mr. Mahmoud Ali Youssuf, minister of International Cooperation of the Republic of Djibouti, on his part pointed to the increased volume of import and export traffic to and from Ethiopia through the port of Djibouti following the border conflict between Ethiopia and Eritrea; the improved port facilities of Djibouti, the management of the port by the port of Dubai starting 2001, the newly designed port in Doraleh that would cost more than 500 million Euro would contribute to the future increased trade activity between Ethiopia and Djibouti.
The concession contract framework states that the concessionaire would be a share company incorporated under the Ethiopian law, having a minimum of share of 51%. It also says that the concessionaire will be responsible for the overall operations of passenger and freight services, and could also be responsible for the maintenance, operation and the renewal of the railway infrastructure as well as the management of the railway estates to be incorporated in the concession.
The framework also states that the strategic shareholder, along with the minority share holders should also envisage the development of infrastructure , and the procurement of additional rolling stocks .
According to Ato Abraha Naizgie, the General Manager of the CDE who had visited the railway systems of Ivory Cost and Mali, says CDE compares favorably, particularly considering the 42 million Euro promised by the EU for the rehabilitation program.
The 781 Km long railroad 681 Km of which is found in the Ethiopian territory would serve more than 30 million people directly or indirectly.
The tender document would be available for potential and interested bidders as of April 10, 2004. The deadline for submission of pre-qualification proposal would be May 31, 2004. The signing agreement with the winner would be by June 2005 to start the management of the railroad by September 2005.