By MulukenYewondwossen
After three consecutive bids to liberalize the multimodal operation of the Ethiopian Maritime Authority (EMA) hitting a brick wall, another round of invitation bid in the coming few weeks is set to take place, Capital has learnt.
The upcoming floating process is said to attract more promising companies to the scene.
As per the decision of the government to add four more multimodal operators besides the existing Ethiopian Shipping and Logistics (ESL), which has managed the scheme for almost 12 years, the authority has been floating bids. Unfortunately, the first two were refuted within a short time span while the third one was evaluated in detail, up until weeks ago when the EMA informed participants of the annulations.
According to the information from one of the potential bidders, the authority disclosed that the bid will be issued in the coming few weeks.
Since the government introduced the multimodal scheme in 2011, the ESL was established in the same year with the amalgamation of two long established and one new public logistics enterprises; Ethiopian Shipping Lines, Ethiopian Maritime Transit Service and Dry Port Service Enterprise, respectively. Later on, the Comet Transport, a land transport enterprise also joined the logistics giant.
However, in the grand scheme of things, the multimodal transport of goods proclamation no. 548/1007 does not impose the involvement of the private sector and is still a monopoly of ESL, which has been a point of contention between the private logistics operators and the government.
Cognizant of this, the government has in multiple occasions given its word to open up the sector for competition to which a tangible move was seen when the regulatory body issued a directive to give a license for those who have a capacity to join the scheme as per the pre conditions set on the document.
Despite the move being seen as a step in the right direction, things are yet to materialize.
According to the information Capital obtained from logistics actors who are showing interest to be part of the scheme, the last selecting process that was annulled about four weeks ago was canceled without any clear explanation, “Nonetheless, we were informed by EMA that the bid will be floated in the very near future.”
Bolloré Transport & Logistics Ethiopia, a French based company dominant in African logistics business that came in Ethiopia when the government partly opened the logistics sector on joint venture basis about three and half years ago, TikurAbay Transport Plc, a regional state enterprise,Ethio Djibouti Railways, a company formed by Ethiopian and Djibouti government with the major stake of the first, Panafric Global Plc,one of prominent freight forwarding companies in Ethiopia led by Elizabeth Getahun, the current president of Ethiopian Freight Forwarders and Shipping Agents Association, Gulf Ingot FZC Industries Plc, a UAE based company that operates in Djibouti and Ethiopia and Ethiopian Railways Corporation, which overlooks the Addis Ababa Light Rail Transit and other upcoming national lines, are some of the interested entities that are involved on the bid that was recently suspended.
According to the plan, the government has decided to include additional four multimodal players besides ESL.
According to the sector experts, the first two bidding processes were delayed due to the request from interested participants, who needed more preparation while the third one was almost done before it was suddenly cancelled a few weeks ago.
According to sources the bid is expected to be floated in the coming weeks but the specific date is not disclosed.
Currently, the major share of import commodities is managed under the multimodal scheme, which is a mode of transport scheme that included sea, railway, land or air from the loading port to destination.
There are criterions to be selected as a multimodal operator according to the directive issued about two years ago that includes; the company or enterprise to have a paid-up capital of 350 million birr in cash and other assets, where-in at least 10 percent shall be deposited in cash in a recognized bank.
The other precondition is that the company is expected to have or rent for minimum of 4 years properly fenced and secured minimum 5 hectares of land. “Out of this, a minimum of 3 hectares shall be well-developed terminals and a 3,000 square meter warehouse built with concrete and block,” the directive stated.
The bar set raised major concerns from potential local logistics companies who claimed it is very difficult for them to fulfill all requirements while on boarding a joint venture bases.
Experts on the sector said that on the fresh bidding process that is expected to transpire in the coming few weeks, additional bidders, particularly local players will take part in the bid.