$700m Ethiopian highway gets started after four-year search for funding

A Chinese company has begun work on a major new expressway in Ethiopia designed to connect more than a million people and boost trade in agriculture and tourism.

China Railway Seventh Group started the first phase of the 200km Modjo-Hawassa Expressway on 10 December, with Ethiopia’s Prime Minister, Hailemraim Desalegn, declaring the project finally open.

A subsidiary of the state-owned giant China Railway Engineering Corporation, China Railway Seventh won the contract from the Ethiopian Roads Authority in November to design and build the 57km stretch from Modjo Town to Meki.

In 2010 Ethiopians had to travel for an average 3.7 hours to reach an all-weather road

With its bid of approximately $171m (3.6bn birr) for the section, it beat two other finalists, another Chinese firm and Spanish-Indian joint venture. Work is to be completed within 42 months.

In all there will be four sections comprising the new fast road link between Modjo and Hawassa, with funding coming from different sources.

When all four are built, with an estimated cost of $700m, road users will have to pay a toll to drive on it, local news organisation Addis Fortune reports, adding that the 10 December start was the culmination of a four-year search for financing.

According to the African Development Bank, the highway will improve the connectivity of "high-potential farming and tourism areas", linking a dozen urban centres and more than a million people.

It will also help improve Ethiopia’s transport links to other African countries and ports.

One million trees will be planted along its length, according to Addis Fortune.

Roads and poverty

The Ethiopian government has prioritized building up its road network to spur economic growth and lift people out of poverty.

In 2010 Ethiopians had to travel for an average 3.7 hours to reach an all-weather road, according to government estimates.

The other three phases of the new highway are from Meki to Ziway, Ziway to Arsi Negele and Arsi Negele to Hawassa.
At Modjo the highway will join the new Addis-Adama Expressway (pictured).

The Meki-Ziway section has been financed by the Korea Export Import Bank, which extended a $228m loan to be repaid over 40 years. This section was awarded to Keangnam Enterprise Limited, a Korean company that subsequently went bankrupt. That work is now being reassigned.

The 57Km section of the expressway between Ziwaya and Arsi Negele has been awarded a concessionary loan of $370m from the World Bank Group repayable in 38 years.

Loan financing has yet to be secured for final section, although the Chinese Export Import Bank has expressed an interest if the contract goes to a Chinese company.

The road was planned by Techniplan International Consulting, an Italian firm, and reviewed by local consultant Ethio-Infra Engineering.

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