Overseas Infrastructure Alliance (OIA), an Indian contractor, was awarded a 78 million dollar project to design and survey the Mekelle-Djibouti railway line by the Ethiopian government a month ago.

The plan includes the construction of 34km of light railway lines and 2,395km of national railway lines in two development routes.

OIA is also undertaking the construction of Tendaho Sugar Factory with a 350 million dollar loan from the government of India.

After the agreement was signed, the government of India offered a 300 million-dollar loan to support the Ethio-Djibouti Railway project. The agreement and the offer took place during the India-Africa Summit in Addis Ababa last month.

In the course of the summit, Manmohan Singh, Prime Minister of India, promised to supply more funds for the development of railway lines.

The Addis Ababa-Djibouti railway is part of the government's plan to lay down 5,000km of railway lines along seven economically important routes. And sources say that the government is considering another railway to Kenya.

The plan for expanding railway networks is expected to involve 40 to 50 companies engaged in designing and construction of the network. In addition, it will also involve over 20 manufacturers of spare parts and providers of electro-mechanical services as well as metal engineering.

The Ethiopian Railway Corp (ERC) had awarded contracts for the design, survey, and supervision of four railway tracks to 18 contractors in September last year. It had at first approached category three consultants and above for an expression of for the projects, which were divided into smaller lots.

Neither ERC nor OIA was willing to comment.

Source: Fortune