Ethiopian Railways Corporation (ERC) is to outsource the construction and management of railway lines that will be constructed in the future for private companies.
The Corporation said it had signed a memorandum of understanding (MoU) to outsource the Modjo-Hawassa-Arbaminch-Moyale railway line for a foreign company.
Of the railway projects planned as part of the five-year second Growth and Transformation Plan (GTP-II), the country managed to launch only the Awash-Woldia-Mekelle railway due to difficulty in obtaining loan from financiers.
The Modjo-Hawassa-Arbaminch-Moyale railway line is among the projects affected by problems in securing loan. However, an agreement was signed to outsource it for a private company.
Dr Engineer Getachew Betru, Chief Executive Officer (CEO) of the Ethiopian Railways Corporation declined to name the company which signed the MoU.
The agreement was signed by taking experiences of countries which succeeded by employing similar system, such as China, USA, Japan and Egypt from Africa, he said.
The outsourcing will depend on the agreement concluded between the government and firms, he said, adding the firms have the right to construct the railway lines and manage them until the reimbursement of construction costs.
Moreover, if they agrees, the firms can rent out for the government after constructing the railway lines.
“The system is new for Ethiopia. But there is a plan to outsource the construction of the railway lines planned as part of the second GTP,” he said.
Ethiopia planned to build a total of 5,000km long railway line across the country and in order to achieve the target, a feasibility study is underway to outsource the construction of the lines for private companies.
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