A planned Railway network connecting Ethiopia and the Somaliland Berbera Port is set to change the economic spectrum in the horn of Africa.
Ethiopia is considering connecting Berbera Port into the Ethio-Djibouti Railway network under the public-private partnership (PPP) investment platform.
The proposed project that is called ‘port to port connection project’ is expected to be carried out under the 10-year development plan that was recently endorsed.
The project is expected to be developed under PPP arrangement with potential investors.
The project may have an estimated 310 km distance from Ayisha, which is connected with the Ethio Djibouti Standard Gauge Railway, to Berbera Port.
However, most of the project would be carried out inside the border of Somaliland, the administrator of Berbera Port.
The railway will be a game-changer in trade between Ethiopia and Somaliland. Ethiopia hugely depends on the Somalilands Berbera Port for imports and maritime trade.
Ethiopia alongside United Arab Emirates company DP World and Somaliland have come together to invest in the expansion of the strategic Berbera Port.
Currently, DP World, a Dubai-based port operator, has carried out a massive expansion at Berbera Port, which is a good alternative for southeastern and southern parts of Ethiopia.
The document from the Ministry of Transport (MoT) that was disbursed at the summit indicated that only 60 km would be inside the Ethiopian border, while the remaining 250km will be developed in Somaliland.
The project distribution indicated it is expected to open alternative sea access and important international railway corridor to the country.
It added that the project envisions constructing a standard gauge railway line compatible with the existing Addis Ababa-Djibouti line, railway stations, port rail connection and auxiliary facilities.
The estimated cost of the project is USD 1.5 billion; however, it is noteworthy that it did not clearly explain whether the amount is the total cost between the two countries or only on the Ethiopian side.
On similar lines, experts commented that the amount should include the project of Somaliland.
The MoT description said that the project will improve the inland transport system of Berbera Port and will have an impact on all areas along the line and facilitate development of the port service industry and national economy of Ethiopia.
At the same time the government of Ethiopia through the transport ministry and DP World have signed a Memorandum of Understanding (MoU) that would see the construction of a road linking Ethiopia to Berbera in Somaliland.
A road infrastructure that will connect Berbera port to Wajjale, a city on the border of Somaliland and Ethiopia is already under construction and is expected to be completed at the end of next year.
The road project is funded by the Abu Dhabi Fund for Development and the UK Department for International Development.
When linked the entire road will further position Berbera as one of the key trade gateways in the region and will be one of the fastest and most efficient routes for Ethiopian transit cargo.
Source: busiweek.com
