In 2009, it was reported that there was no passenger service beyond Dire Dawa, hence for several years the Ethio-Djibouti Railways (ED-Railways) had annual deficits and was in need of rehabilitation. The European Commission prepared a grant of EUR 40 million in 2003 and raised it to EUR 50 million in 2006. On November 29, 2006, an agreement was signed with the Italian consortium Costra, and work began in 2007 on sections of the line that deteriorated following the Ogaden War
A change in management was expected to raise the capacity of the railroad from its current average of 240,000 tons to 1.5 million tons. Initially in 2006, the South African firm Comazar was chosen to receive a 25-year concession. However, this plan was not executed, and early in 2008, it was announced that the railway was in negotiations with the Kuwait Company, Fouad Alghanim and Sons Group.
Thereafter Ethiopian government announced that it had spoken with the visiting Indian Minister of State for External Affairs, Shashi Tharoor, during his visit on 29 January 2010, about funding to improve the cargo capacity of the rail track from 14 to 17 tons, which would boost the national trade volume significantly.
The railway is still not useable. However after several years of contradictory announcements and false starts on repairing the existing railway, Ethiopia has unveiled plans to build an entirely new line. The first phase will cost $US 1.2 billion. A Chinese company is to handle the construction and the Chinese government will fund it.
For information on Djibouti Railway contact details, please see the following link: