Addis Ababa: Ethiopia expects to open a new railway line linking the capital Addis Ababa with the Red Sea state of Djibouti in early 2016, a project at the center of plans to create new manufacturing industries, the head of the state railways said.

The 700km line is being built at a cost of US$4 billion (RM14.47 billion) by China Railway Engineering Corporation (CREC) and China Civil Engineering Construction (CCECC).

Ethiopia is seeking to have 5,000km of new lines working across the country by 2020.

“By October 2015, a considerable portion of the Addis Ababa-Djibouti project will be finished,” said Getachew Betru, chief executive of the Ethiopian Railways Corporation, adding that trains would run soon after. “We will start early 2016.”

In addition to the Djibouti line, two others are being built across the country which are among a range of big infrastructure investments that also include new roads and dams to produce hydro-electric power.

In a bid to keep the economy expanding at the 8% or more it is already achieving, the nation of 96 million people wants to become an African manufacturing hub, offering investors efficient transport, plentiful labor and cheap power.

In the capital, a new US$475 million light railway system will be tested in the next few weeks before scheduled services start. It will be the first city metro to operate in Sub-Saharan Africa.

Among the new national railway lines, one will connect the region of Afar, where Ethiopia is encouraging the mining of potash for fertilizer, to Djibouti, the main export point for land-locked Ethiopia. Canada’s Allana Potash Corp is among the firms developing mines in Afar.

Most Ethiopians still depend on subsistence agriculture, but the country is building a textile and garment industry, produces shoes, assembles cars and trucks and other products. It is drawing some investors from China and India, where wages are rising.

For now, logistical difficulties such as poor roads and an old fleet of trucks mean transporting goods from the capital to Djibouti can take days. The new railway line will cut the journey time to about eight hours.

“It is a game-changer for us,” said Getachew. “It will be one of the most vibrant economic corridors in the world.”

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