Perils of a rail link built with Chinese funds

(The Hindu) -- 
Nizar Manek, 19 May 2019
Due to electricity shortages, the railway could be blocked for a whole day of operations
The train had crossed the frontier on Chinese-built rails between Ethiopia and Djibouti. Barren escarpments and acacia trees were flowing past the windows. Behind lay Ethiopia and a disclaimer at the ticket booth warning passengers to travel at their own peril. Funded by China’s Exim Bank for $4.2 billion, this is Africa’s first electrified railway, except that it is not really. “Look at the electricity shortage: the train could be blocked for a whole day of operations,” Djibouti’s Finance Minister Ilyas Dawaleh told this writer in his office in Djibouti City.
In January, Mr. Dawaleh said, operations were halted for half a day when a train was blocked by protesters amid conflict on the border between Ethiopia’s Afar and Somali States. Ethnic Afar feared Somali annexation of villages. “Everyone’s taking hostage of the infrastructure,” Mr. Dawaleh said. Besides the Ethiopian unrest, nomadic people demanding compensation for run-over camels too were not factored into a feasibility study Exim Bank approved for the over 700-km Ethiopia-Djibouti Railway in 2013, before disbursing the loan ($490 million) for Djibouti. In April, an Ethiopian freight train skidded off the tracks. Revenue forecasts for the railway, meant as a pivot for Ethiopia’s export-oriented industrial development dream, have been cut to a third against the feasibility study. The track remains incomplete in both the nations and the railway transports only one commercial train a day, not three as planned, said Ahmed Osman, Governor of Djibouti’s Central Bank.
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Ethiopian Region Demands Probe Into Killings Near Sudan Border

By Nizar Manek, May 7 2019

  • Friday violence left 200 people dead in Amhara state

  • Ethnic nationalists want territorial boundaries dismantled

International investigators should probe the killings of more than 200 people in Ethiopia amid a territorial dispute near the Sudanese border, a regional official said.
The violence occurred on Friday in Agew Awi Zone in Amhara state, according to Adigo Amsaya, the deputy president of neighboring Benishangul-Gumuz state.
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Ethiopia Pays Too Little to Clothing-Factory Workers, Study Says

By Nizar Manek, May 7 2019

  • State assured customers its workforce would accept low wages

  • Nation supplies retailers including H&M, Gap and PVH

Ethiopia should gradually increase base wages for workers in its nascent clothing-making industry and address ethnic unrest in a region housing its flagship industrial park, according to a study by New York University.
The entry-level pay for those producing for retailers including Hennes & Mauritz AB, Gap Inc, and PVH Corp. at Hawassa Industrial Park is 750 Ethiopian birr ($26) a month, according to the report by the Stern School of Business’ Center for Business and Human Rights. The annual wages are 40 percent below the average Ethiopian per capita income of $783, according to the study.
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Ethiopia Charges Ex-Security Officials With Abuses, Fana Says.

By Nizar Manek, May 7 2019
(Bloomberg) --
Ethiopia charged 26 former officials of its National Intelligence and Security Services, including ex-Director General Getachew Assefa, the ruling party-funded Fana Broadcasting Corp. reported.
Four of them, including Getachew, were charged in absentia at a court in the capital, Addis Ababa, with gross human rights violations. They include torture, forced confessions, sodomy, rape, electrocution, and arbitrary detention of people in secret facilities, Fana said, citing a statement from the Attorney General’s Office.
(125 words -- Bloomberg Terminal)

South Sudan Parties Agree Delay to Transitional Government

By Okech Francis and Nizar Manek, May 3 2019
(Bloomberg) --
South Sudan’s government and rebel leaders agreed to postpone the introduction of a transitional government for six months to complete the conditions of their peace deal.
The postponement came after two days of talks in Ethiopia’s capital, Addis Ababa, where rebel leader Riek Machar sought to delay the formation of a unity government later this month to address issues including an agreement on regional boundaries and the implementation of security measures that all sides are confident in. Its creation was agreed in September, the last in a series of deals since December 2013 when fighting started that cost the lives of almost 400,000 people and displaced more than four million others.
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`There Was Nothing Left,' 737 Crash Kin Lament, as Agony Deepens

By Nizar Manek, Todd Shields and Janan Hanna, May 2 2019

  • Jet slammed into ground, leaving crater and shattered debris

  • ‘We had nothing to cremate’ says a relative of six victims

(Bloomberg) --
A crater surrounded by barbed wire and guarded by police marks the spot where Ethiopian Airlines Flight 302 plunged to earth after a terrifying six-minuteflight, killing 157 people and sending Boeing Co., the plane’s manufacturer, into turmoil.
In the seven weeks since the disaster, the grief of family members has been joined by growing frustration over what they say is a lack of information from authorities and the failure to receive the remains of their loved ones.
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Chinese Car Shipments Touted as Growth Avenue for Djibouti Port

By Nizar Manek, April 23 2019

  • Doraleh Multi-Purpose Port will also support manufacturing hub

  • Doraleh Container Terminal expects to reach 85% of capacity

A Djibouti port part-owned by China Merchants Port Holdings Co. plans to handle vehicle shipments from China and Europe as it chases other avenues of growth after meeting targets during its first year of operations.
The rapid growth of new business lines underlines why Chinese companies are scurrying to get a foot-in-the-door in the tiny northeast African nation, a passing point for about a third of the world’s shipping traffic. Businesses from the world’s second-biggest economy are involved in everything from rail to banking as part of China’s Belt and Road Initiative, which often uses debt to fund infrastructure and other projects.
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China Merchants in Talks to Replace Ousted Djibouti-Bank Partner

By Nizar Manek, April 17 2019

  • Djibouti government seeks new shareholder in lender Silkroad

  • IZP stake bought back by investors after money-laundering fine

(Bloomberg) --
China Merchants Bank Co. is in talks to take a stake in Djibouti’s Silkroad International Bank SA after a unit of China-based IZP Group was expelled as a shareholder after being penalized for allegedly breaching anti-money laundering rules.
The discussions are an illustration of the deepening ties between the world’s second-biggest economy and the tiny northeast African nation, a passing point for about a third of the world’s shipping traffic. IZP Group’s Globebill Technology Co. was among third-party payment companies fined by China’s foreign-exchange regulator for violating rules on cross-border payments, Beijing-based Caixin Global reported in February.
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European Banks May Fund Djibouti Airport After China Deal Nixed

By Nizar Manek, April 11 2019

  • Djibouti cancelled China Civil Engineering contract in 2017

  • Potential loan for $420 million will be repaid over 15 years

(Bloomberg) --
A syndicate of European banks are in talks to finance a new airport in Djibouti after the government canceled a contract awarded to China Civil Engineering Construction Corp., the Red Sea nation’s port authority said.
The German Development Bank, known as KfW, is leading the group of lenders considering whether to provide a $420 million commercial loan for the project, Djibouti Ports & Free Zones Authority Chairman Aboubaker Omar Hadi said in an interview. No deal has been finalized yet, he said.
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Ethiopia Crash Victims' DNA Samples to Be Sent for London Tests

By Nizar Manek, April 9 2019
(Bloomberg) --
Ethiopia will send DNA samples taken from the victims of last month’s Boeing Co. 737 Max jet crash for identification tests in London.
The remains of the 157 people who died are currently in a hospital in Addis Ababa, the Ethiopia capital, Musie Yehyies, the spokesman for the transport ministry, said in an interview. Human tissue has been gathered by a team led by Interpol and the U.K.’s Blake Emergency Services, the official said, without saying exactly where the tests will be carried out.
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Djibouti Needed Help, China Had Money, and Now the U.S. and France Are Worried

By Nizar Manek, April 6 2019
The African nation is tiny, poor, strategically located—and deeply in debt to Beijing.
(Bloomberg Markets magazine) --
Inside the carriages on the 10-hour rail journey through land-locked Ethiopia into the tiny Red Sea state of Djibouti, the chirping of mobile phones mingles with a mashup of regional languages and the murmur of the devout at prayer. A woman in a yellow frock trundles past maroon-upholstered seats with her cart: “Coffee! Bunna! Tea! Chai!”
At first glance, there’s nothing conspicuously Chinese about the Addis Ababa-Djibouti Railway, but then you spot the train’s Chinese driver and a few Chinese passengers huddled on a bunkbed. In fact, says Ilyas Moussa Dawaleh, Djibouti’s good-­humored finance minister, “It’s all about the ‘C.’” The railway wouldn’t exist in its current form without a massive infusion of Chinese loans—indeed, most of Djibouti’s economy relies on Chinese credit. And the Chinese might not have shown as much interest if it hadn’t been for Djibouti’s geostrategic location: About a third of all the world’s shipping steams past this barren land on the northeast edge of Africa en route to and from the Suez Canal, the Red Sea, and the Indian Ocean.
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Ethiopia Indicates Boeing Investigation Could Go Beyond a Year

By Nizar Manek, April 6 2019

  • Authorities to release interim report if deadline passes

  • Boeing to receive report for comment before its public release

(Bloomberg) --
Ethiopian authorities would be prepared to release a more detailed set of findings on the crash of an Ethiopian Airlines Boeing Co. 737 Max jet that killed 157 people if the investigation drags on beyond the year-long target for the probe.
“It depends on the complexity of the investigation,” Amdye Andualem, chairman of the Ethiopian Accident Investigation Bureau, said in an interview in Addis Ababa on Saturday. “If we cannot release the final report within a year, we can release an interim report,” he said, citing International Civil Aviation Organization guidelines. “These are the next steps.”
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