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Bill proposes liberalization of rail transport

Bill proposes liberalization of rail transport

As the debt of the Ethiopia Railway Corporation (ERC) mounts to a staggering level, a new draft proclamation proposes to issue permit to private railway transportation service providers to be accommodated on the national railway infrastructure.

The draft proclamation entitled “Railway Transportation Administration” was tabled before the House of People’s Representatives for approval on Thursday. Private companies that could pass through the licensing processes will be allowed to participate in the railway transportation services sector, according to the draft bill.

According to the same bill, railway transport service is defined as an activity of transporting passengers or goods from one place to other using trains along a railway infrastructure. Similarly, the bill has defined what Railway Undertaking means. “Railway undertaking means a government or a private institution which holds a relevant license and whose main function is to provide railway transport service to the public”.

Therefore, companies willing or involved in the railway transport can render their services on the already built railway infrastructures such as the Addis Ababa Light Railway as well as the Addis Ababa Djibouti-Djibouti railway infrastructure.

Owners of these already built railway infrastructure are identified by the draft proclamation as the “Infrastructure Manager,” which is an institution responsible for administering of the railway infrastructure, particularly for maintaining the railway infrastructure, directing and controlling train traffics and installing relevant signs and signals along the railway infrastructure.

“It is necessary to create favorable condition for the expansion of railway transport for making it supportive for the country’s social and economic development as a transport subsector,” the preamble of the draft proclamation reads.

Licensed railway undertaking companies are required to enter contracts with the railway infrastructure manager. “No railway undertaker shall give railway transport service through payment unless it has an updated tariff, approved by the ministry which is in charge of specifying the payment and the conditions on which it gives the service to customers by transporting passengers and goods,” stipulates article 16 of the draft proclamation.

Though this draft proclamation is prepared to generally administer the railway sector, it has coincided with the debt crisis that snagged the Ethiopian Railway Corporation (ERC).

Currently, ERC’s total debt has reached at the shocking level of 120 billion birr.