Ministry of Transport gives final warning to 148 truck importers which have been awarded to import 3200 trucks.
A year ago with advice of the macroeconomic committee, the National Bank of Ethiopia to purchase more vehicles by interested and capable companies have been selected by the ministry Following the issuance of a bid, 168 companies vied to buy 3200 freight trucks with a credit facility from the Commercial Bank of Ethiopia (CBE). For the procurement of the trucks, a tender was then floated on January 12, 2021. The trucks were expected to be delivered to the country within 60 to 120 days, and had to meet the specifications outlined in the bid document including the payload and carrying capacity.
“With the trucks being expected to be imported within four months as per the agreement, companies have not followed through with the stipulated timelines,” said Abdulber Shemsu, head of the logistic council.
As he further explains, only 20 companies have opened LC, and will be importing 900 trucks. To this end, for the ones that have fallen behind, on Tuesday January 25, 2022, the ministry issued a final warning to the 148 companies.
“In light of the delay, the ministry has written a letter to the companies in order for them to at least open LC up to February 8, 2022,” said Abdulber, adding that if they do not follow through, they will have to take over the award.
“Considering the situation in the country, we have been tolerating the companies,” he stated.
According to Abdulber, after opening LC, the companies are expected to start the procurement process and import the trucks within 3 months.
The procurement is set to ease problems in the logistics sector brought on by a shortage of trucks. With the initiative, the private sector will procure the trucks through a supply credit modality approved by the National Logistics Council.
The companies will raise 30pc of the value, while the remaining will be covered by a loan secured through the central bank’s guarantee.
The modality requires prospective companies to put up an initial deposit with the remaining to be financed by a credit facility. The buyers of the trucks will pay the remaining 70pc to the Commercial Bank within two years. According to the agreement the buyers are expected to find the truck manufacturers or suppliers themselves and select the models and prices as well as the linkage between the potential companies that will be delivering the vehicles.
Shortage of trucks in the country is one of the logistic problems. Due to the shortage of domestic trucks, there are activities underway to bring trucks from neighboring countries to provide services for a short period of time. As Abdulber said companies are working to get about 400 trucks from Kenya. Last year 150 trucks were availed by the Sudanese government. There are about 25,000 trucks in Ethiopia, but only 13,000 vehicles are cross bordering.
As officials said the multi challenging conflict in the northern part has left or destroyed vehicles making the problem worse.