The government decided to subsidize the tariff of the metropolitan Light Rail Transit (LRT) that becomes operational as of today.
The Ethiopian Railway Corporation (ERC) was established as a public enterprise in November of 2007, and it is set to provide affordable modern mass transportation. Today, the LRT becomes officially operational on the south-west line connecting Kality to Minilik Square via Lideta. The other line, stretching from Ayat to Tor Hailoch, will commence service in the coming month.
On public discussions held on Tuesday, September 14, the corporation disclosed the tariffs for the new LRT service. The minimum tariff will be two birr for short trips, four birr for medium length trips and six birr for the longer trip that is about 17kms.
Recommendations from independent market analysis indicated that the tariff should be much higher than other public transport schemes, but the corporation has decided to subsidize fare prices in the initial stage of the LRT’s operation.
Getachew Betru (PhD/Eng), founding CEO of ERC, told the media that the railway project’s aim is to support the public economically, rather than expanding the corporation’s cash flow. He said that the corporation has for this reason decided to put up subsidized prices instead of increasing the tariff.
“In the future, we will look into becoming operational without a subsidy. Right now we have to subsidize the services until we are in a stronger position,” the CEO explained.
Shenzen Metro Group, a Chinese public enterprise, has been hired by the corporation to manage and maintain operations for the next five years, at a cost of USD 116 million. The Chinese contractor managing the LRT at the cost of USD 475 million is also under negotiation with the government to undertake the extension of another 34km on fall our side of the current line.
ERC was established with paid a up capital of USD 750 million and was given the assignment of designing and building both the national railway and an urban light rail network in Addis Ababa. The LRT connects the city from all directions through two lines; Kality- Merkato-Piassa and Tor Hailoch-Ayat.