Ethiopia’s Chinese-built railway creates a $60 million headache


Addis Ababa’s light rail line is one of China’s signature infrastructure projects in Africa. But, with limited and dwindling resources, most of its trains switched from daily services to running on alternate days in September with delayed repairs. Fears are growing that all trains might be suspended indefinitely.

The 32-kilometer modern railway line, which connects the center of Addis Ababa with its suburbs, was funded by China Export-Import Bank and began operating in November 2015. Developers intended to provide a template to be emulated in other African nations. And it was hoped that the line would ease congestion in Ethiopia’s capital, which is held back by inadequate infrastructure.

Late last year, Exim Bank of China withheld a further loan of $339 million to Ethiopia due to the nation’s inability to pay its mounting infrastructure loans to the Asian nation, with many projects paused in the midst of foreign currency shortages and recurring conflicts.

The failure of the Addis Ababa train project raises the question of whether feasibility studies carried out ahead of the launch of such expensive projects are inadequate.

The Addis Ababa rail line was a poorly planned and executed project that went ahead for purely political reasons and was destined to fail, according to Alemayehu Geda, an economist at Addis Ababa University who has researched the China-Africa relationship.

“In Ethiopia, as well as in other African nations, we often show poor negotiation skills when we deal with such loans, as well as on our implementations later on,” he said. “In particular with the local light rail, they lack spare parts as well as a foreign exchange to import parts and they need about $60 million to bring them to a certain standard.”

The fact that maintenance is only carried out by Chinese engineers also means knowledge and skills aren’t being transferred to locals, said Alemayehu, which means locals aren’t developing the expertise needed to fix problems and generate jobs.



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