Infrastructure
ERC Aims to Complete Awash–Kombolcha Railway in Two Years
Capital Ethiopia · 2 hours ago · Read the Full Story on Capital Ethiopia
AI SUMMARY
The Ethiopian Railway Corporation plans to finish the Awash–Kombolcha–Woldiya–Hara Gebeya railway project within two years following the resolution of a compensation dispute with Yapı Merkezi.
- The Ethiopian Railway Corporation plans to complete the remaining construction of the Awash–Kombolcha–Woldiya–Hara Gebeya railway project within two years.
- The 392-kilometer railway project was initially awarded to Turkish contractor Yapı Merkezi in August 2015 under a $1.7 billion contract.
- A four-year arbitration dispute in London concluded on September 23, 2026, resolving the contract performance, delay, payment, and war damage disputes.
- The arbitration ruling ordered Ethiopia to pay Yapı Merkezi $213.7 million in damages including nine percent interest, alongside $29.1 million in advance payments.
- The damages include $67.4 million in unpaid amounts, $76.7 million for construction delays, and $89.2 million for asset damage during the northern conflict.
- Yapı Merkezi had initially sought over $1 billion in compensation, while Ethiopia filed a $400 million counterclaim.
- A 27-member Ethiopian team of experts, led by Addis Ababa University law professor Tilahun Teshome, represented the country in the arbitration.
- The tribunal dismissed claims against the Ministry of Finance and the Ministry of Transport and Logistics, reducing the risk of overseas asset enforcement.
- The tribunal ordered Yapı Merkezi to transfer project vehicles and machinery to the ERC.
- Yapı Merkezi announced it was awarded $307 million, with the ERC attributing the discrepancy to differences in interest calculation periods.
- Neither the ERC nor Yapı Merkezi currently intends to appeal the decision within the 28-day window.
- The ERC is also focused on repairing railway infrastructure damaged by conflict and earthquakes, with work underway in Kombolcha and Dessie.
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