Overseas Infrastructure Alliance (OIA), an Indian company, was awarded a 78 million dollar contract for the design and survey of the planned Mekelle-Djibouti Railway Line by the Ethiopian government a month ago.
OIA is also undertaking the construction of Tendaho Sugar Factory with a 350 million dollar loan from the Indian government.
The signing was followed by the extension of a 300 million dollar line of credit by the Indian government to support the new Ethio-Djibouti Railway project. This happened on the sidelines of the India-Africa Summit late in Addis Abeba late in May 2011.
During the summit, Indian Prime Minister Manmohan Singh (PhD) pledged to supply more funds for the development of railway lines in what he called an attempt to promote regional integration through infrastructure development.
The agreement between the Ethiopian government and OIA, which previously supplied machinery to the Ethiopian Electric Power Corporation (EEPCo), forms part of the GTP railway expansion project. The plan envisions the construction of 2,395km of national railway lines and 34km of light railway lines in two development corridors.
The Addis Abeba-Djibouti Railway forms part of the government's plan to lay down 5,000km of tracks along seven different routes of economic importance.
The Mekele-Djibouti Railway Line is expected to become a growth corridor in the northern part of Ethiopia and to link the region with Djibouti.
An additional railway is being planned to Kenya, according to sources.
The expansion initiative is expected to involve 40 to 50 companies working on the design and construction of the network. It would also see more than 20 manufacturers producing spare parts and providing metal engineering and electro-mechanical services.
The Ethiopian Railway corp(ERC), which was established by the government in 2007 with a capital of three billion Birr, awarded contracts for the design, survey, and supervision of four railway tracks to 18 companies in September 2010.
Category three consultants and above were initially approached by the ERC to express interest for the projects, which were divided into smaller lots.
Both the ERC and OIA declined to comment.