Ethiopia’s New Railway Plan Envisions Direct Line To The Red Sea

ERC, Yapi Merkezi arbitration continues in London

The Ethiopian Railway Corporation (ERC) has unveiled plans for a USD 1.58 billion standard-gauge railway intended to connect northern Ethiopia with the Red Sea ports of Tadjourah, Assab, and Massawa.

‎The infrastructural ambitions were laid out in a 21-page company report presented on Tuesday, October 21, 2025, during the National Railway Business and Investment Summit held at the Skylight Hotel in Addis Ababa.

The document obtained by The Reporter describes the 216 kilometer, single-track Weldiya-Hara Gebeya-Mekelle standard-gauge rail project as ongoing and estimates its total cost at close to USD 1.6 billion.

‎“The railway connects Ethiopia with Tadjourah, Assab and Massawa ports,” the summary reads, situating the line squarely within the government’s broader campaign to regain maritime access.

‎When asked by The Reporter Woldiya–Mekelle Corridor Includes The Kombolcha-Hara Gebeya Section, erc chief executive officer hilina belachew (eng.) clarifed that the project is septen from an arbitration Case involving the Awash–Kombolcha Railway (Akh) Project.

‎”The Awash–Kombolcha-Hara Gebeya Project and the Woldiya–Mekelle Project are different projects. The arbitration pertaining to the former project has not yet been completed,” she said, noting that the arbitration for the AKH project with Turkish contractor Yapi Merkezi remains unresolved though most issues have reached preliminary decisions at the London Court of Arbitration.

‎Hilina added that rehabilitation programs and financing mobilization efforts are underway to resume stalled works, with new maintenance and wastewater system fixes planned for the fiscal year.

‎The dispute between the Corporation and the Turkish contractor involves the AKH railway project, launched in 2015 with financing from the Turkish Exim Bank. Construction was later suspended following the outbreak of conflict in northern Ethiopia, which made project sites unsafe and inaccessible.

‎Officials say the war caused severe damage to equipment, stations, and unfinished infrastructure along the corridor. The construction work was forced to a stop as fighting spread through the Amhara and Afar regions. The escalation compounded earlier challenges linked to foreign-currency shortages and cost adjustments.

‎ERC and Yapi Merkezi have since filed claims against each other at an international arbitration tribunal. The contractor argues that design changes and force-majeure conditions increased costs, while ERC accuses the company of contract breaches and performance lapses.

Hearings are still underway, with preliminary rulings issued in favor of ERC, while the case has yet to be concluded, officials told The Reporter.

‎The suspension left key sections, particularly between Kombolcha and Hara Gebeya, incomplete. ERC says it is now preparing rehabilitation and financing plans to resume the works.

The Corporation also aims to separate legacy disputes such as the Yapi Merkezi case from new projects, including the Woldiya–Mekelle line, to maintain investor confidence and continue the country’s railway expansion.

‎Asked about other operational ventures and whether cross-border links are advancing, the CEO told The Reporter that several associated projects are in early stages and aligned with the National Railway Master Plan.

“There are cooperative and joint regional studies related to those. These studies highlight the regional integration we are pursuing with various countries,” she explained, referring to initiatives aligned with African Union directives.

‎Hilina emphasized that financing such large-scale links would require “diversified mechanisms” and collaboration with regional partners to make the projects bankable.

The revelation of a railway directly connecting Tadjourah, Assab, and Massawa comes against a backdrop of Ethiopia’s renewed political drive for sea access.

‎Last year, Djibouti’s government formally offered Ethiopia full administrative control of Tadjourah Port, but as of December 2024, Addis Ababa had not responded to the offer.

At the time, ‎Mahmoud Ali Youssouf, former Djiboutian Foreign Minister and current Chairman of the African Union, told The Reporter that his country’s gesture was meant to “defuse tensions between Addis Ababa and Mogadishu” and to reaffirm that “landlocked countries should have free, predictable, and unhindered access” under international law.

‎“We have offered it, but we are still waiting for the response,” Youssouf said during a press briefing at Djibouti’s embassy in Addis Ababa last year.

He referenced the Türkiye-facilitated Ankara Declaration signed between Ethiopian Prime Minister Abiy Ahmed (PhD) and Somali President Hassan Sheikh Mohamud, which sought to normalize relations following tensions over Ethiopia’s MoU with Somaliland.

Prime Minister Abiy reiterated Ethiopia’s long-term maritime ambition in a September 2025 interview with state media, declaring that the return of Assab is “a matter of time”.

‎Speaking beside the newly filled GERD reservoir, he said, “The Red Sea was part of Ethiopia thirty years ago. The mistake took place yesterday and will be corrected tomorrow.”

‎Officials have since framed sea access as a matter of “national survival.”

Brigadier General Teshome  Gemechu, director-general for international relations at the Ministry of Defense, described Ethiopia’s claim over Assab as “historical” and “irrevocable,” while State Minister of Finance Eyob Tekalign said access to the Red Sea now forms part of the country’s geopolitical strategic agenda.

‎Eritrea, however, has rejected these assertions.

In a September 3 post, Eritrean Information Minister Yemane Gebremeskel dismissed Addis Ababa’s remarks as “reckless saber-rattling” and “political hogwash,”reiterating Eritrea’s 1993 referendum as an independent act of decolonization.

Nonetheless, ‎ERC’s plan to link directly to Red Sea ports follows years of technical groundwork. Back in October 2018, the Ethiopian Maritime Affairs Authority (EMAA) announced completion of a study specifying port usage rates and logistics services for Eritrean ports.

‎The study envisioned equipping Massawa Port with new infrastructure and coordinated tariff frameworks, in line with bilateral normalization between Ethiopia and Eritrea that year.

‎“Works were underway to equip the Port of Massawa with the necessary facilities, including renovation of roads,” EMAA communications head Yeshi Fekade said then, confirming that Eritrea was conducting its own tariff study.

The peace thaw that year also opened prospects for the state-owned Ethiopian Shipping and Logistics Service Enterprise (ESLSE) to operate out of Massawa. Then-CEO Roba Megerssa told The Reporter in September 2018 that the Enterprise was “optimistic of winning a tough competition to take over the Eritrean Port of Massawa”.

‎He added that ESLSE was examining new cargo opportunities, including livestock carriers, and viewed the opening of the logistics sector to foreign partners as “a blessing rather than a threat.”

‎The latest ERC disclosure effectively places Ethiopia’s railway investments within a strategic Red Sea corridor plan that meshes physical infrastructure with diplomatic overtures.

‎While Djibouti’s Tadjourah offer remains unanswered, Ethiopia’s leadership continues to frame maritime access as both a developmental and sovereign priority. The planned Woldiya–Mekelle line, explicitly described as a port-linking route, signals that the government is pressing ahead through domestic institutions even as regional politics remain unsettled.

‎However, analysts contend that with financing needs exceeding USD 1.5 billion, execution will hinge on foreign partnership and multilateral funding, aligning with ERC’s own reference to “diversified financing mechanisms.”