The contract was signed in Addis Ababa on June 27 by ERC general manager, Dr Getachew Betru, and Yapi Merkezi's general manager, Mr Sami Ozge Ariogle.

The new 375km single-track electrified line will run from Awash, on the Addis Ababa - Djibouti line currently under construction, via Kombolcha to Hara Gebeya. Construction will take 42 months and Yapi Merkezi will be responsible for constructing the line, a depot and yards, and an operations control centre and for procuring equipment including signalling and telecommunications.

Earlier this month, ERC awarded a $US 1.5 billion contract to a Chinese civil engineering contractor for the construction of the northern section of the line from Woldiya/Hara Gebeya to Makelle. A final phase involves constructing a line from Woldiya east via Semera and Elidar to the Djibouti port of Tadjourah to carry export potash.

These new lines form part of Ethiopia's plan to create a national standard-gauge rail network totalling 4744km. Currently the country's only line is the 781km metre-gauge link from Addis Ababa to the port of Djibouti.