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The newly formed Ethiopian Railway Corporation (ERC)
is scouting for equity contributions of its paid up
capital (750 million Br) in order to launch
operations of building railway infrastructure and
run both cargo and passenger services.
The Corporation, which is tasked with the job of
building a railway network reaching 5,000Km to
connect different parts of the country, was
established in November 2007, after the Council of
Ministers decided to form it under the supervision
of the Ministry of Transport and Communications. Its
Minister, Junadin Sado, has requested Prime Minister
Meles Zenawi few weeks ago to instruct seven state
enterprises to chip in with the contributions, which
is part of the three billion Birr authorized
capital.
“As the country develops its natural resources in
the field of mining - exploiting its vast deposits
of iron ore in the west, gas and oil fields in the
east and commercial agriculture - it requires an
effective transportation system,” Junadin was quoted
as saying by the Reuters last week.
Minister Junadin now wants the state owned telecom
monopoly, the Ethiopian Telecommunications
Corporation (ETC), bring the largest contribution of
400 million Br. The state utility monopoly, the
Ethiopian Electric Power Corporation (EEPCo) will
also be requested to contribute 210 million Br.
Other state enterprises on the line are Mugher
Cement Enterprise (50 million Br), Ethiopian
Shipping Lines (30 million Br), Maritime Transit
Services, Wonji, and Metehara sugar factories each
20 million Br.
A senior official from the Ministry confirmed to
Fortune that the request has been made to the
Prime Minister, whom they expect will decide in two
weeks after consultation with the Minister of
Finance and Economic Development.
Approached by Fortune to comment, Beyene G.
Meskel, general director of the Privatization and
Public Enterprises Supervising Agency (PPESA), a
federal agency to whom many of the state enterprises
are accountable to, said he has not been familiar
with the request for equity contribution made by
Junadin, who is also chairman of the Board of
Directors for the Corporation.
Other directors are heavyweight minister in Meles’s
Administration, including Arkebe Oqubay, Mekonnen
Manyazewal, and Tadesse Haile, state ministers for
Works and Urban Development, Finance and Economic
Development, and Trade and Industry, respectively.
Mehiret Debebe, general manager of EEPCo, is also a
director of the Board.
The directors have already appointed chief executive
officer for the Corporation: Getachew Betru, a U.K.
trained engineer who received his doctorate from
Edinburgh, Scotland University, has joined the
Corporation as its first chief. Coming back after 13
years in England, his passion for railway is hardly
new. Four years ago, he came out public with a grand
idea of developing a railway line stretching from
Addis Abeba to Adama (Nazareth), at a projected cost
of one billion Birr. The plan was to transport
300,000 people daily between the two destinations.
Getachew disclosed to Fortune his priority of
recruiting staff members, and developing business
plan. It will comprise a project, in its initial
phase, of building a railway network in Addis Abeba:
From Entoto to Kaliti, and from Keranio to Ayat
residential estate. Getachew disclosed that public
tender is already out in order to select a
consulting firm to provide the Corporation with
consultancy services on this project.
“Much is expected from this Corporation,” said a
director in the Board.
And soliciting fund to finance its projects, in
particular the foreign exchange part, will be an
uphill task, according to this director. The
government eyes countries such as India and China as
well as international finance organizations.
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He Asks the PM to Instruct Seven State Enterprises Raise the
Fund