ADDIS ABABA DJIBOUTI STANDARD GAUGE RAILWAY PROJECT

ESMAY 2, 2012 *

Topics of Discussion*Background Information

Development of A.A Djibouti New Standard Gauge Railway Line

Techno-Economic Feasibility Study

Conclusion

Background*A)Socio-Economic Conditions

EthiopiaArea: about 1 million square kilometerPopulation: 74 million (2007 Census); 80 million in 2011

Addis Ababa (capital city)

Population: 2.74 Million (2007)cover 32.27% all cities populationannual growth rate 2.1%

Growing City : size of 540 sq. km About 110 Embassies/Consulates Head Quarters of AU and UNECA

DjiboutiBorder countries:Eritrea 109 km, Ethiopia 349 km, Somalia 58 kmArea: 23,200 square kilometerPopulation: 774,389 with a growth rate of 2.285% (2012 Census) Capital: Djibouti Two-third of the population of the country live in the capital city

*Background continued

The Economy of the two countries (Ethiopia and Djibouti) is highly integrated and is at the stage of convergenceVarious Preferential & Bilateral AgreementsClosely work at different levelsThe Heads of State and GovernmentJoint Ministerial Commission Joint Border AdministrationTechnical CommitteesMembers of IGAD, COMESA*Background continued

Background continued*B)Transport and other infrastructure

NoParameterUnit of MeasurePrior to 1991Cumulative 20102011 2015

1Roadkm26,050(FRA + RRA)48,800(FRA + RRA)64,500 (FRA + RRA)71,523 (URARP)2RailwaykmAbout 800 (old meter gauge)Preparation for standard gauge 2,395 (new standard gauge)3PowerMW

Background continued*C) History of Railway in Ethiopia and Djibouti

Railway service began before 100 yrs (1915)

The Legacy Railway is 1,000 mm gauge with diesel traction

It is owned and administered by the governments of Djibouti and Ethiopia (Bi-lateral ownership and operation)

It stretches from Addis Ababa Djibouti (about 780 km: 680 in Ethiopia and 100 in Djibouti

Background continued*One Meter gauges were very popular in East African Countries (Kenya, Uganda, Tanzania )

In all of these countries, all suffer from old-age, lack of spares, technology obsolescence

High operating cost, worn out track, too old Locomotives, low capacity (12 -16 Ton/Axle)

Intermittent service only in few one segment (Dire Dawa to Port of Djibouti 459 km)

A legacy system and historical tie of sisterly countries

Ethiopian National Railway Network*

Background continued*G) Railway Development Approach

Two Phases of development1st Phase/GTP (2010/11- 2014/15) about 2,395 km2nd Phase (2015/16 2020/21) about 2,665 km

Deploy multiple Lots in parallel

National Railway Network CharacteristicsStandard Gauge (1,435 mm)Electric Traction High Capacity (22 - 25 Ton/axle)Moderate Speed (120- 160 km/hr for passenger and 120 km/hr for freight) Concrete Sleeper (160cm x20.5cmx22cm)

*Development of A.A Djibouti continued

*b) Consultation: Bilateral (with Republic of Djibouti)Signed MoU on June 10, 2010 The Development and Operation of Standard Gauge Railway Line between Ethiopia and DjiboutiFollow-up meetings and work visits by Ministers

Establishment of technical working group

Technical experts experience sharingSubmission of draft Bilateral agreement on The Development and Operation of a Standard Gauge Railway Network by FDRE to the RoD

Development of A.A Djibouti continued

*c) Consultation with EPC/Turnkey ContractorsConstruction contract for Addis Ababa Mieso Signed on October 25, 2011Construction contract for Mieso Dawanle (border of Ethiopia with Djibouti) signed December 16, 2011. Construction Contract Project from Ethiopian border to the Port of Djibouti has signedDevelopment of A.A Djibouti continued

*Techno-Economic Feasibility Continued3.3Transport Demand Forecast - Volume

CargoType09/10Base yr10/1111/1212/1313/1414/1515/1616/1717/1818/1919/20Export79189497812621597182420842221237025352631ImportDry 52565529526157046189672173047944864694169597Fuel28803148345237904114447148625293576763446401Total8927957196911075611900130161425015458167831829518629

*3.3Transport Demand Forecast - Volume

Techno-Economic Feasibility Continued

CargoType09/10Base yr20/2121/2222/2323/2424/2525/2626/2727/28Export79129203241359839944433492054626063ImportDry 52561065311825131251456916172179501992522117Fuel2880710678878754.7971810787119731329014752Total89272067822953254782828031391348443867742932

3.4 Project Financing and Cost EstimateFinancing15% Equity and 85% loanCost Estimate*Techno-Economic Feasibility Continued

Investment Costs (million USD Equivalent)Cost CategoryEquityFinancing Debt FinancingTotal (USD)Railway Works *535.1 3,032.29 3,567.4 Telecom Supply **4.40.04.4Power Supply **62.20.062.2Right-of-way29.50.029.5ESIA7.60.07.6Rolling stock0.0366.2 366.2 Total638.93,398.5 4,037.4

5. ConclusionThe project has great socio economic significance or the Peoples and Governments of Ethiopia and DjiboutiThe Corridor has sub-regional, regional and continental importanceThe Project isSocially Acceptable;Technically Feasible; Economically ViableEnvironment Friendly

*

Thank You

*

******************