The Ethiopian Railway Corporation has signed a Memorandum of Understanding with four foreign companies to study for a new railway line between Ethiopia's Capital, Addis Ababa and Djibouti, the weekly Addis Fortune reports. The companies, China Communication Construction Company (CCCC), China Railway Group, Overseas Investment Alliance (OIA) from India, and a Russian company, are said to be undertaking their own individual studies on the project to make their decisions.

Ethiopian government intends for the project to kick start by July and Fortune reports that the Chinese company is likely to get the project.

The government chose to build a new railroad instead of upgrading the old one, because the old one allowed speeds of only 20km per hour, while the new one would enable up to 50km per hour, according to Fortune report.