Public-private partnership in store for Addis rail line

The Ministry of Finance plans to engage in a public private partnership (PPP) engagement in railway infrastructure with domestic and foreign investors. The sector bankrupted the nation by swallowing extra expenses so that the revenue didn’t even cover its operation cost.
The government is working to tackle the distress quickly by reforming policy through technical support from the World Bank, Ahmed Shide, Minister of Finance said.
The Ethiopian government provided 15 percent equity for the Addis Ababa Light railway transit (LRT) project and China’s Export-Import Bank, an arm of the Chinese government, paid for the rest of the USD 475 million cost aiming at solving Addis Ababa’s transport problems which was completed earlier in 2015 as the first fully-electrified line in Africa.
Addis Ababa-Djibouti cross-border electrified standard gauge railway that runs over 700 km is another project which is funded by Exim Bank. It is part of the Chinese Belt and Road Initiative.
“We need to further strengthen our capacity in planning, implementation, and maintaining various projects as well as expanding existing projects, and building new partnerships to realize our ambitions,” the minister said to lawmakers.
“The aim of the PPP is to expand public services, reduce project delays, and increase resource utilization and minimize debt stress,” said Haji Ibssa Corporate Communication Director at the Ministry of Finance.
The country’s external and domestic accumulated debt hit 27 billion USD which funded different projects including the Addis Ababa Light railway and the Etho- Djibouti railway.
According to the Ministry of Finance, 9.4 billion birr is paid for external debt in this nine months of the budget year.
Presenting opportunities for public private partnership (PPP) to take part in railway and other projects requires study and analysis as we are entering the scheme for the first time Hajji adds.
The decision to liberalize the economy and privatize state-owned companies in telecommunications, aviation and banking, Airlines, Ethiopian Shipping & Logistics Services Enterprise and Ethiopian Electric Power as part of Prime Minister Abiy’s reform is underway by establishing technical and steering committees under the Finance Ministry, as well as a macro committee under the office of Prime Minister.
Currently there are Public-Private Partnerships wroth USD 7 billion in three road and 14 power supply projects.