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Ethiopian Government Cancels Ethio-Djibouti Fuel Pipeline Project

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THE REPORTER — The Ethiopian government canceled the planned Ethio-Djibouti fuel pipeline project, reports the Ethiopian weekly English newspaper, the Reporter.

In 2014 the South Africa-based infrastructure investment group, Black Rhino, proposed to the Ethiopian government to build a 550km long pipeline to transport diesel, gasoline and jet fuel from the Port of Djibouti to central Ethiopia.

A senior Ethiopian government official stated that the government has canceled the project due to financial reasons. The official said though the pipeline project is viable, the government wants to protect the Ethiopian Railway Corporation which will soon start transporting petroleum products.
“We have built a new railway line to Djibouti with an investment cost of four billion dollars. And 100 fuel tanker wagons are ready to transport fuel from Djibouti. We have to maximize the use of the railway and pay back the loan to the Export Import (EXIM) Bank of China first,” the Ethiopian official said.

The project is estimated to cost 1.5 billion dollars. The Ethiopian government had reviewed and accepted the proposal in principle. Backed by the US investment group Black Stone, Black Rhino has undertaken a feasibility study on the project, which was going to be the first fuel pipeline in Ethiopia.

He said that while the country has a newly-built railway line, the construction of another expensive infrastructure cannot be justified. The International Finance Corporation (IFC) – the investment arm of the World Bank – had expressed interest in financing the planned Ethiopia-Djibouti fuel pipeline project.

“It is not that the project is unable to secure loan but while we are having the railway line in place building another fuel transport infrastructure is not economically a sound decision,” the Ministry of Transport official said. However, he said the construction of the pipeline can be considered after four or five years.

Ethiopia’s annual fuel import, which is growing at a rate of ten percent, has reached 3.8 million MT. The country so far uses tanker trucks to transport the fuel from the Port of Djibouti to central Ethiopia costing the country dearly. Fuel theft, adulteration and waste are also other challenges with the road transport.

The governments of Ethiopia and Djibouti signed a framework agreement on the planned pipeline construction in 2015.

Djibouti

The most valuable military real estate in the world

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Strategically placed at the entrance to the Red Sea, Djibouti is home to more foreign bases than any other country.

DJIBOUTI — “World War III will start here.”

We had been driving around the streets of this African city for more than an hour, and my companion — an agent from the national intelligence service whom I will call Mohammed — was excited by the implications of what he had been showing me.

Strategically placed at the entrance to the Red Sea, commanding a large percentage of the trade and energy flows between Europe and Asia, Djibouti is home to more foreign bases than any other country. We drove by one of the four surviving French bases. The perimeter was wide, but the building immediately reminded you of an old Foreign Legion fort, with its run-down walls and picturesque watch towers.

What a contrast to the dark and menacing Chinese naval base I had visited the day before or the autonomous city in the desert that is Camp Lemonnier, the American base.

Mohammed — who asked that an alias be used to protect his identity — must have sensed my bemusement and pointed out that another French base, on Cape Heron, is today more of a tourist resort for quiet swimming and barbecues than an armed camp.

“The French will never leave that one,” he said. “And if they do, it will be immediately taken up by the wealthiest families.”

Welcome to “The Coming Wars,” where over the next few months we’ll examine a world where borders are becoming increasingly meaningless, but where rivalry and the potential for conflict remain undiminished.

As new powers rise and the formerly hegemonic West loses relative power, we are entering the first period in human history in which modern technology will be combined with a chaotic international arena, in which no single actor or group of actor is capable of imposing order.

The coming wars may be armed conflicts, but they could also take radically different forms: struggles to control infrastructure, propaganda battles, tech races in artificial intelligence and robotics, cyberwar, and trade and economic warfare.

Only one thing is certain: They will be contested by nations with deeply integrated economies and infrastructure across borders that are diluted, permeable and sometimes supple.

This column will take us to the most important hot spots, where we’ll talk to the decision-makers and reveal stories taking place behind the curtain. If the world is heading toward a major conflict or war, we need to think about what shape it will take and where it could plausibly start.

And what better place to begin than Djibouti?

As France — the first to maintain a military presence in the country — slowly abandons its bases due to budgetary constraints, others have been moving in. The United States recently opened a second base on Chabelley Airfield — unmentioned in its public list of overseas bases — after its drones interfered with air traffic at Camp Lemonnier.

The country hosts China and Japan’s only foreign military bases. There’s an Italian base too and Saudi Arabia is building one as well. Djibouti has made overtures to Turkey. And, according to Mohammed, (and later an second independent source) Russia has made inquiries.

India too is rumored to be considering the possibility of acquiring a block of the most prized military real estate in the world. If it does, every major global power will have a Djibouti footprint and the country will resemble a live model of state conflict in the 21st century.

During my stay in the city, I witnessed French and Japanese soldiers competing for the attention of the local prostitutes in the center nightclubs, and the Chinese and Americans using every opportunity to try to take pictures of each other’s equipment and logistics. Colonel Bogoreh — the top commander of the Djibouti Coast Guard — told me a revealing story: After Chinese sailors kept taking unauthorized photos of an American destroyer, he was asked to step in and provide some order.

But what happens in case of war between countries with adjacent military bases in Djibouti?

The answer is not clear, and much would depend on the nature of the conflict. If India does indeed open a military base in Djibouti, any future conflict with China would immediately spread there, because Djibouti is so central to China’s ability to encircle India. In a scenario of conflict between the U.S. and China in the South China Sea, their bases in Djibouti would be put on high alert, but they could very well remain uninvolved.

Another possibility is that warring states would choose Djibouti as the scenario for a limited conflict. Every territorial dispute between China and Japan is so fraught with danger that the two countries might prefer to have a show of force far away in Africa.

A recent episode seems to confirm this interpretation: As revealed by an indiscreet piece in the official newspaper of China’s Supreme Prosecutor, last year a Japanese naval ship sent frogmen to approach and spy on a Chinese warship as both ships were docking at Djibouti.

In the last century, conflict was carefully organized along clear borders and spheres of influence, but today, globalization has left rivals all jumbled together — and Djibouti is the perfect image of this new world, where major powers are forced to share the same space.

“Around us you can draw a circle with eight military bases. We are completely surrounded. Most countries would find this strange, but for us …” Mohammed stopped for a moment. “I guess it is quite normal.”

Bruno Maçães, a former Europe minister for Portugal, is a senior adviser at Flint Global in London and a nonresident senior fellow at the Hudson Institute in Washington. His book “The Dawn of Eurasia” will be published on January 25.

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Djibouti

Chinese-built Ethiopia-Djibouti railway begins commercial operations

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Ethiopian attendants participate during the opening ceremony of Ethiopia-Djibouti railway at the Lebu station in Addis Ababa, Ethiopia, on Oct. 5, 2016. (Xinhua/Sun Ruibo)

ADDIS ABABA, Jan. 1 (Xinhua) — The Chinese-built 756-km electrified rail project connecting landlocked Ethiopia to Djibouti officially started commercial operations on Monday with a ceremony held in Ethiopia’s capital Addis Ababa.

Contracted by two Chinese companies, the first 320 km of the rail project from Sebeta to Mieso was carried out by the China Rail Engineering Corporation (CREC), while the remaining 436 km from Mieso to Djibouti port section was built by the China Civil Engineering Construction Corporation (CCECC).

Speaking on the occasion, Ahmed Shide, Ethiopian Minister of Transport, hailed the standard gauge project as a milestone in China-Africa cooperation.

In addition to further enhancing economic ties as well as the people-to-people links between Ethiopia and Djibouti, it will have significant contribution to the ongoing development efforts of building a new Ethiopia, said the minister.

The minister urged local people, especially residents living by the line of the rail, to take care of it for its successful and sustainable operation.

Emphasizing on its huge significance and importance, Tan Jian, Chinese Ambassador to Ethiopia, noted that the project would contribute to the industrialization and diversification of the Ethiopian economy, and also towards the country’s growth and transformation plan.

“It is the first trans-boundary and longest electrified railway on the African continent. We, the Chinese, see this as earlier harvest project of the Belt and Road initiative. It is regarded by many as a lifeline project for both countries, for Ethiopia and for Djibouti. And we see this as a railway of development; as a railway of cooperation; and as a railway of friendship,” he said.

The ambassador has reiterated China’s commitment to further cooperating and closely working with Ethiopia and Djibouti to the railway’s smooth operation.

The Addis Ababa-Djibouti railway project has been carried out with an investment of 4 billion U.S. dollars, and China’s Exim Bank has provided a loan.

Speaking on his part, Djibouti Ambassador to Ethiopia, Mohamed Idriss Farah, said the railway project would have significant contribution to the economic integration between Djibouti and Ethiopia.

“This is important corridor, important railways between Djibouti and Ethiopia; we are working for our economic integration between our two countries. And this project was part of the economic integration, but not only economic integration but also connecting the peoples of Djibouti and Ethiopia,” said the ambassador.

The railway provides both passenger and freight services between Addis Ababa and Djibouti.

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Briefing Room

Djibouti is open to Turkey’s efforts to safeguard Red Sea, ambassador says

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Djibouti is open to any kind of approach from Turkey such as building a military base to secure the Red Sea, Djiboutian ambassador to Ankara Aden H. Abdillahi has said, pointing to possible steps that could be taken to strengthen military ties between the two countries.

Citing the Red Sea as the second-busiest sea way in the world, Abdillahi said: “This international sea way must be secured and the international community needs to ensure that this area is safe from all kinds of threats.”

In line with efforts to enhance the security of the region, the ambassador said that “possible steps from Turkey to build a military base in the country would be welcomed.”

Djibouti has become home to key military bases due to its strategic location on the Horn of Africa. The small country on the Red Sea hosts the largest permanent U.S. military base in Africa as well as military bases of France and China and Japan’s only foreign base. The country lies on the Bab el-Mandeb Strait, which is one of the busiest shipping routes.
Commenting on the recent graduation of Somali troops from the Turkish military base, the ambassador said that as a neighbor of the country, “Djibouti feels gratitude for Turkey for providing help to the government of Somalia.” He added that Somalia should be supported in its fight against threats of terrorism that affect the daily lives of the people, pointing to the recent terrorist attack in the Somali capital of Mogadishu.

He said the bilateral ties between the two countries have enhanced since the opening of a diplomatic mission in Djibouti in 2012, and that friendly relations between Turkey and Djibouti go back to the 16th century. Abdillahi also welcomed Turkey’s increased attention on Africa and its recent initiatives. “Turkey already started opening up to Africa in 2005, and in 2008, we had a Turkey-Africa summit. I think this new approach will boost ties further.”

Touching on the visit of Djiboutian President Ismaïl Omar Guelleh to Turkey, Abdillahi said: “Omer Guelleh’s visit to Turkey will completely change the relationship between the two countries.” He said that the visit will pave the way for further cooperation in various fields, including education, health and economy. The two countries signed many agreements while he was in Turkey.

In relation to the economic relations between the countries, the ambassador said that Turkey and Djibouti agreed on establishing a Turkish special economic zone that will enable Turkish business to establish industries.

“The business community can reach out to the region having a special economic zone with many facilities that will also allow Turkish business to target the whole region,” he said. He added that the port facilities in Djibouti rank among the best in Africa and that the economic zone provided to Turkey is close to the port.

Pointing out that Djibouti is the entry point of the region, he said many investments have been made in the port facilities, railways and highways to connect the whole region.

“In East Africa, the potential that we have is huge, and Turkey has great potential, as well. Building a strong partnership will benefit both sides. Today, this area is booming,” he said.

In relation to the U.S’s decision to recognize Jerusalem as the capital of Israel and relocate its embassy from Tel Aviv to Jerusalem, Abdillahi said: “We need to thank Turkey for its leadership for emphasizing that the decision cannot be accepted.”

Turkey condemned the decision from U.S. President Donald Trump, and Erdoğan urged world leaders to oppose the decision in an Organisation of Islamic Cooperation (OIC) summit in Istanbul. The OIC announced that it recognizes east Jerusalem as the capital of Palestine.

The U.S. decision was rejected in the United Nations General Assembly, which has isolated the country.

“We need to express our solidarity with the people of Palestine who have been suffering, and accept the two-state solution,” Abdillahi said. He added that the decision to reject the U.S.’s steps was a wakeup call and Turkey’s decision to open an embassy in east Jerusalem would be a game changer

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