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AddisAbaba-Djibouti Railway: way to prosperity amid COVID-19 epidemic

Updated: November 17, 2022 Source: Belt and Road Portal
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The AddisAbaba-Djibouti Railway, the first electrified trans-boundary railway on the African continent, has witnessed growing operation revenue since it was officially put into commercial operation in January 2018, and has realized an operation revenue increase of 45 percent in 2019 compared with that in 2018. Despite the impact of the COVID-19 epidemic, the railway realized a year-on-year increase of 51.38 percent in terms of the operation revenue in the first half of 2020, which is commendable.

On September 17, 2020, the Ethiopia-Djibouti Standard Gauge Railway Share Company (EDR) and the joint venture established by China Rail Engineering Corporation (CREC) and China Civil Engineering Construction Corporation(CCECC) (CREC-CCECC Joint Venture) jointly held a development strategy and freight service introduction conference themed “AddisAbaba-Djibouti Railway: Way to Prosperity” at the Lebu Station on the outskirts of Addis Ababa, the starting point of the AddisAbaba-DjiboutiRailway, to introduce the operation achievements, freight services, and the development plan and prospects of the railway.

-- Chinese team ensures the smooth operation of the railway

The Addis Ababa-Djibouti Railway, officially known as Ethiopia-Djibouti Standard Gauge Railway, has a total length of 752 kilometers and a design speed of 120 kilometers per hour. With a total investment of about 4 billion U.S. dollars, the railway was jointly undertaken and operated by China Railway No. 2 Engineering Group Co., Ltd., a subsidiary of CREC, and CEECC. Commenced in 2012 and completed in June 2015, the railway started trial operation at the end of 2016 and entered commercial operation on January 1, 2018, with the CREC-CCECC Joint Venture responsible for the daily operation and maintenance.

During the Second Belt and Road Forum for International Cooperation in April 2019, the Addis Ababa-Djibouti economic corridor and the industrial parks along the economic corridor were included in the Joint Communique of the Leaders’ Roundtable of the Second Belt and Road Forum for International Cooperation, becoming the first project of the economic corridor catalyzed and supported by connectivity.

Since the COVID-19 epidemic broke out at the beginning of 2020, the Chinese operation and maintenance team has strived to overcome various difficulties caused by the epidemic, and made great efforts to ensure smooth transport of various cargos with local parties, making the AddisAbaba-Djibouti Railway a real transport lifeline and livelihood guarantee line. A total of 588 freight trains transported 38,400 containers and 730,000 tonnes of cargos. In particular, it assisted Ethiopia in transporting 140,000 tonnes of urgent supplies like fertilizer and wheat from the port of Djibouti, which ensured the production of local enterprises and the supply of people's livelihood. For this reason, the owner sent a 7-page commendatory letter to praise the excellent performance of the Chinese team. In line with the Ethiopian government's national strategy to increase the cold chain logistics to facilitate the export of agricultural products, the Addis Ababa-Djibouti Railway opened the cold chain transportation service on August 22, opening a channel for Ethiopia to export its fresh agricultural products overseas.

As a transport artery, the Addis Ababa-Djibouti Railway has also made full use of its advantages of large volume and high efficiency to actively provide emergency services for Ethiopia during the epidemic. When the first COVID-19 case was confirmed in Ethiopia in late March, a group of university students stranded in the eastern city had to return to the capital Addis Ababa. Responding to the urgent needs of the Ethiopian government, the Chinese operation and maintenance team planned and dispatched two temporary passenger trains to evacuate 1,267 university students from Dire Dawa, making positive contributions to the epidemic prevention in Ethiopia.

-- Ethiopia enhances railway capacity

Over the past two years, the Chinese management team has recruited 1,934 local employees, trained 888 people, sent 34 people to China to learn train driving, and actively assisted the owner in promoting the railway-related capacity building. Dagmawit Moges, Ethiopia's transport minister, expressed her thanks and said that the Addis Ababa-Djibouti Railway is a major infrastructure jointly constructed by Ethiopia, Djibouti and China. As a regulator, the Ethiopian Ministry of Transport has been paying close attention to and supporting the operation of the railway. She said, "We are delighted to see that the Chinese team continuously creates new operation results and passes on China's railway expertise to the people of Ethiopia and Djibouti.” She believes that the railway will attract more customers and achieve sound development in the future.

The Addis Ababa-Djibouti Railway is not only a transport line, but also an economic corridor and a way to prosperity. It opens up the road for Ethiopia, the only landlocked country with more than 100 million people in the world, to go overseas, effectively promotes the industrialization and urbanization development along the railway line, and shows great value during the epidemic, said Tan Jian, former Chinese ambassador to Ethiopia. He called on all parties to continue to support the Addis Ababa-Djibouti Railway, actively use the railway and invest in it and the economic belt along it to help the railway achieve greater success.

Guo Chongfeng, assistant general manager of CCECC and representative of the CREC-CCECC Joint Venture, said that the Addis Ababa-Djibouti Railway is a flagship project cooperated by Ethiopia, Djibouti and China, and a witness of the friendship between the Ethiopian people and the Chinese people. When talking about the five-year plan for the railway project, he said that after more than two years of commercial operation, the railway has entered a sound development cycle.

The railway realized an increase in the number of daily freight trains from 2 to 4 in November 2020, and brings 280,000 U.S. dollars of daily operation revenue by 2022. The annual operation revenue is expected to reach 100 million U.S. dollars and the operation cost will be about 70 million U.S. dollars. This means that the railway will be able to break even on the cash flow of operation revenue and operation cost, achieving profitability for the first time in 2021. In 2023, there will be 6 pairs of freight trains per day. It is estimated that the annual operation revenue will reach 150 million U.S. dollars, the operation cost will be about 80 million U.S. dollars, and the annual profit will be about 70 million U.S. dollars. That’s to say, the Addis Ababa-Djibouti Railway will realize sustainable development. Moreover, more efforts will be made to achieve the long-term development of the railway, that is, run 20 pairs of trains per day.

Guo Chongfeng said, the Chinese believe that road is very important to make wealth. The Addis Ababa-Djibouti Railway has set up an economic corridor between Ethiopia and Djibouti. Ethiopia has planned 13 industrial parks along the railway, 10 of which have been completed (9 have been opened), creating more than 100,000 jobs. With the continuous improvement of railway supporting facilities, logistics services and operation safety environment, the railway will attract more international investors and greatly boost Ethiopia's industrialization and national economic development. It is believed that with the realization of the goals of the 2020-2023 plan, the Addis Ababa-Djibouti Railway will become an international brand and a large income generator that the Ethiopian people are proud of, and will help Ethiopia become a major trading country in Africa and realize the dream of national rejuvenation. As the design, construction and operation service provider of the Addis Ababa-Djibouti Railway, we are glad to contribute to the economic take-off and national rejuvenation of Ethiopia.

Editor: Jiang Feifan