Ethiopia and Djibouti have entered an agreement which will see them establish a joint company which will manage the newly built Ethio-Djibouti railway.
The 750-km railway line linking Ethiopia's capital Addis Ababa and Red Sea state of Djibouti was formally inaugurated in October this year. The Chinese built project was designed at creating new manufacturing industries, improved transport and further opening landlocked Ethiopia.
Ethiopia's minister of transport, Ahmed Shide and his Djiboutian counterpart, Mohammed Abdulkadir Musa, signed the agreement after the negotiation that took more than a year, the state affiliated FANA broadcasting corporate reported.
The agreeement will help ease transportation as was envisaged at the launch of the railway line linking both countries. The company will be headquartered in Addis Ababa, and will have the responsibility to prevent passengers, freight and maintenance services for the route, according to the agreement the new railway line was estimated to slash the journey time between the two countries to nder 10 hours. Ethiopia is seeking to have 5,000 km of new lines working across the country by 2020.
The electrified and environmentally friendly project will also replace a diesel-powered Addis Ababa-Djibouti line.
''It is a part of trans-African railway network so it will give an opportunity for connecting Ethiopia with another neighboring country and it will minimize the cost of transport and transport time and it is free from pollution, it uses renewable energy and so on, ''Ethiopian Railways Corporation (ERC) communication manager, Dereje Tefera said in October.
The ERC official said the close to 4 billion US dollar project was 70% financed by Chinese. EXIM Bank with the remaining 30 percent financed by the Ethiopian government. The construction was handled in two parts by China Railway Engineering Corporation (CREC) and China Civil Engineering Construction (CCECC).