ETHIO-DJIBOUTI STANDARD GAUGE RAILWAY SHARE COMPANY /EDR/ was established, based on the Bilateral Agreement signed on 16 of December 2016 between the two states, the Federal Democratic Republic of Ethiopia and the Republic of Djibouti and the Shareholders Agreement subsequently made on the 11 day of January 2017 among Public Bodies and State Enterprises of the two countries, to be administered pursuant to the commercial laws of Ethiopia.

The Shareholders have agreed to establish an Ethiopian share company, having an initial share capital of USD 500,000,000.00 consisting of 10,000 shares of USD 50,000.00 each, for the purpose of Operating and Maintaining the Line (including the maintenance and renewal of all of the Line infrastructure and equipment) and operating freight and passenger transport services on the Line (including the supply, funding of the purchase or rental and maintenance of rolling stock).

This manual is developed taking the basic principles of Ethiopian Federal Government Procurement laws. Furthermore, to gain best practices from other organizations, procurement manuals of other international organizations were also referred.

It is quite obvious that preparing and practicing standard procurement procedures in an organization will guide procurement personnel through the different stages of the procurement
process. Standardization of procedures is also a crucial element in maintaining transparency, accountability, impartiality and fairness in the procurement process. In addition, it helps to prevent corruption issues, such as suppliers bribing those in charge of the procurement process, the fixing of bid prices or the awarding of contracts to one supplier without competitive bidding. Therefore, it can easily be alleged that the existence of standards helps to ensure that supplies are procured only from ethical sources with good track records.

In general the main principle behind preparing this procurement manual is to support the country‟s economic development by ensuring the concepts of economy, efficiency and effectiveness in the execution of EDR‟s procurement process.