Officials walk along the Awash-Kombolcha-Hara Gebeya railway track during a visit by Ethiopian Investment Holdings and the Ethiopian Railways Corporation on June 30, 2026. [file photo] (Photo: Ethiopian Investment Holdings via X)
The Ethiopian Railways Corporation has taken over the stalled Awash-Kombolcha-Hara Gebeya railway with its own workers and machines, The Reporter said. A legal news service reported that Turkish builder Yapı Merkezi has won more than $300 million in their London arbitration.
Seleshi Kassa, the corporation’s deputy chief executive for railway infrastructure, told The Reporter that state engineers had defended against more than 70 percent of the contractor’s claims. The remaining disputes, mainly over unpaid bills and the contractor’s machinery left on site, are still before the London Court of International Arbitration (LCIA), he said. Yapı Merkezi first sought about $1 billion in damages linked to the war, he said.
State workers have repaired about 70 kilometers of track and are getting ready for test runs, The Reporter said on Saturday. The corporation wants to finish Phase One, up to Kombolcha, within two years and will then decide on the second phase. Work so far uses equipment already on site and has not added large costs, but a full estimate of the repair bill is on hold because of the arbitration.
Global Arbitration Review, a legal news service, gave a different picture on Wednesday. It reported that Yapı Merkezi “has won more than US$300 million in an LCIA claim against Ethiopia’s state railway company over a project delayed by civil war.” The legal database Jus Mundi lists a final award in the case dated October 2, 2026. Umut Çağrı Sarı, who writes on Horn of Africa politics, wrote on X on Thursday that the line “never resumed after the 2022 Pretoria deal,” that the corporation answered with a $1.6 billion counterclaim, and that “after nearly three years, the tribunal ruled for the Turkish company.”
In May, The Reporter said the tribunal had thrown out about $750 million of Yapı Merkezi’s $979.9 million claim, which also asked for 9 percent interest, and had ordered the company to return a $29.1 million advance payment. That left roughly $230 million of the original claim before interest and costs. In the same week, the Turkish outlet TZP quoted Yapı Merkezi board member Emre Aykar as saying the ruling had been issued but the payment decision was still pending. TZP said the tribunal named PwC as its expert on damages, that it had accepted a substantial portion of the contractor’s damage claims, that Ethiopia’s own scenario put compensation at $230 million to $300 million, and that the time since then pushed the amount above $300 million.
The corporation has not publicly addressed the Global Arbitration Review report or said how much it may have to pay. The award itself has not been made public, and Yapı Merkezi has not issued a statement on it. The Reporter described the arbitration as one that “nears a conclusion,” and did not mention a final award.
Yapı Merkezi won the contract in 2015. It was a $1.7 billion engineering, procurement and construction deal for a 392-kilometer line with 12 tunnels and 52 bridges, backed by European and Turkish lenders, to link central and northern Ethiopia with the main corridor to Djibouti. The company argued that its delays came from the corporation’s failure to secure financing and pay right-of-way compensation on time, from weak power supply and from the war in the north, which it said delayed the project by nearly nine years, Ethiopia Observer reported, citing The Reporter. “Unfortunately, when civil war broke out, our project and our equipment were damaged,” Aykar told TZP.
In February, Amhara War Updates, an X account whose profile says it documents the war in Amhara, alleged that soldiers of the Ethiopian National Defense Force and allied militia looted excavators, trucks and steel from Yapı Merkezi’s central camp at Girana, also called Faji, in Habru woreda of North Wollo on February 12. The account said the property was “reportedly looted” and that this “allegedly occurred” after Fano forces left the area. The claim has not been independently confirmed, and the Gov’t has not commented on it publicly.
On June 30, Ethiopian Investment Holdings (EIH), the state investment arm whose portfolio includes the railway corporation, said a joint visit by its delegation, the corporation’s board chair and the deputy mayor of Kombolcha marked the official launch of the “Awash-Kombolcha Railway Line Rehabilitation Project.” In August, EIH said the corporation had earned more than 2 billion birr in the past year and had completed assessments to restart the Awash-Kombolcha-Hara Gebeya and Hara Gebeya-Mekelle lines. In May, Amhara Media Corporation quoted Abdu Hussein, deputy head of the Amhara region, as saying the restart “reflects the government’s commitment to public interest and national development.”
Africa Intelligence reported in September that Ethiopia, after its favourable ruling, wanted to complete the northern line and had approached “several global giants in the sector.” Patrick Heinisch, who does economic research on emerging markets at Helaba, wrote on X in July that the Ethio-Djibouti Railway company was seeking “French and European expertise” to finish the line, “92% of which was built by Turkish company Yapi Merkezi.”
The Reporter also reported a study that Seleshi presented at the 27th convention of the Ethiopian Association of Civil Engineers. It estimated that Ethiopian firms and workers could deliver 68.3 percent of the value of four major railway contracts worth $6.53 billion. Local companies can handle earthworks, drainage, track beds and stations, the study found, while signalling, telecommunications, electrification and the rails themselves will still need imported technology and foreign experts for now.
Phase One ends at Kombolcha, an industrial town in South Wollo. The full route runs on through North Wollo to Hara Gebeya, near Weldiya, across areas where the armed conflict between government forces and Fano has continued since 2023.
Sources:
- The Reporter (Gov’t takes over the railway)
- Global Arbitration Review
- Jus Mundi (final award listing)
- Ethiopia Observer (citing The Reporter, May)
- TZP (Yapı Merkezi board member Emre Aykar)
- Umut Çağrı Sarı on X
- Amhara War Updates on X
- Ethiopian Investment Holdings on X (June 30)
- Ethiopian Investment Holdings on X (August 27)
- Amhara Media Corporation on X
- Africa Intelligence on X
- Patrick Heinisch on X