The first Ethio-Djibouti Railway was built in 1897–1917. The line when commissioned connected Addis Ababa to the Port of Djibouti in French Somaliland, providing landlocked Ethiopia with railway access to the sea. Over a century later, the railway has been replaced by the Addis Ababa–Djibouti Railway, an electrified standard gauge railway that was completed in 2017. To this regard the railway industry has been gaining traction as a preferred mode of transport within the country. The rail transport of goods now appears favorable when compared to the road transport – in terms of volume, costs, safety and speed of transportation for both imports and exports. In order to have a better understanding on the progresses made in this space, Capital caught up with Ethio-Djibouti Railway General Director Tilahun Sarka for an inside scoop of the railway sector. Excerpts;

Capital: What have been your successes in the last four years?
Tilahun Sarka: First and foremost the railway is a testimony to the China- Africa friendship which nurtures a win-win corporation between the two countries. The past four years has seen the railway playing an integral part in the transportation system as it targets to become front in line for the transportation of goods for people’s livelihoods. 90 percent of the railway plan is to transport export and import goods using the Djibouti port which is the main gate way of Ethiopian goods.
Before the operation of the new railway, containers were staying for 8 days at the port without payment or more with payments of demurrage. However, after the launching of the new electric railway we are able to transport our goods from the day it reaches Djibouti port by connecting it mainly with Modjo dry port, which is the main benefit using the train.
In doing so, the railway has cut the transportation time for freight goods from more than three days to less than 20 hours and has also reduced the cost by at least one-third.
In the past, for the old trains, lack of investment and theft had plagued the sector which led to the use of trucks when they were out of business for the transportation of imports and exports. The launching of the railway has been a boost to the transport sector since the start of its operation in 2018, we have been able to grow from transporting 1 million tons to two million tons to date, which is a year on year increase of 25 percent.
In the grand scheme of things, this may seem to not be a lot and that is why we are pushing to give railway transportation a priority because we have the capacity to increase. Nonetheless 25 percent increase is a healthy development as per our analysis.
So for the past 4 years the performance has been going from strength to strength, and the 2021 performance is better in particular. We are all working in concerted efforts to realize even greater performances are recorded in the years to come.

Capital: What makes it different from other modes of transportation? How can this mode of transport benefit the society?
Tilahun Sarka: In my opinion, this mode of transportation has an array of unique benefits. For transportation of goods, it is very secure and presents a space to handle huge amounts of cargo at one time whilst price incurred from the service is lower when compared to other modes. For example, using trains to transport goods cuts the cost of transportation by 30 percent.
Similarly for public transportation use, the train has a capacity to handle 2000 people at any given time providing affordable prices and comfortable service in the process. In this sense, i believe this mode of transports just about edges the other modes.

Capital: Addis Ababa Djibouti railway has launched a commuter train scheme. What led to the realization of this scheme?
Tilahun Sarka: Our stations on average are 45km apart. This means that the railway track as a result can connect one town from the other. So for the communities where the track passes, it plays a crucial role in connecting one community to the next logistically.
In order to develop a culture that embraces railway transportation as well as providing a cheaper means to arriving at various destinations we saw it best to introduce the commuter scheme.
We launched it considering the many resident settlements along the line that have not yet set up a railway station in order to allow them to enjoy the convenience of the railway transportation in addition to the existing 14 stations the railway has. Thus we have added 5 additional stations.
Akaki, Awash, Mulu, Afdem, and Erer are the new 5 stations which tally the number of stations to 19. Residents along the railway can take the commuter train from the 19 stations. Furthermore, the railway brings development in the areas along the rail line.
Now, the public can enjoy this service twice a week.

Capital: Vandalism, insecurity and theft have been noted as challenges for the railway sector. How are you coping with this?
Tilahun Sarka: The stated challenges of course are a huge hurdle for the sector. For example theft has been minimized over time however the challenge still remains. These challenges however cannot just be solved by punishments or penalties. We ought to approach them in a prudent manner. That is why we have rolled out the use of commuter trains in our line so as to create a sense of ownership. Moreover in this regard we are also creating awareness on the matter so as to strengthen public ownership.

Capital: Is there any update regarding the privatization?
Tilahun Sarka: European companies are in talks with the government regarding the privatization of Addis Ababa-Djibouti Railway.
The railway needs an additional investment of 800 million dollars to be fully operational and efficient according to the Ministry of Transport and Logistics.
We ourselves and the government have been encouraging the Chinese companies to have some amount of share on the railway but the companies are undecided on the matter. Of course the question arises on the financial capabilities since the value is worth 4 billion dollars, that being on the construction cost alone. Thus for privatization, a proper valuation assessment is needed.
Currently, the Chinese company -China Civil Engineering Construction Corporation (CCECC), is managing the railway. The government pays about 60 million dollars per year to the managing company which signed agreements for the next two years, having started in 2018. And in due course the local employees who have been trained will take over when the time comes.
The government plans to expand the Addis Ababa-Djibouti railway line to 4,000 km in the ten-year development plan through expanding the railway line and connecting it to other neighboring countries’ ports.

Capital: What is your view on the profitability of the railway?
Tilahun Sarka: In the past year our revenue was 1.8 billion birr, however, our expense was three fold of the stated number. Profit in the railway sector is not something that is always seen. Railways in some developed countries including China and Japan are said to be profitable. But this often takes years to realize returns in investments.
Nonetheless, in order to reel in profits we have to utilize the space where the line passes at various train stations. We can delve into new projects such as hotels and buildings which will act as secondary streams of income.