Fertilizer not as cost effective, subject to corruption
The government is in a hurry, even though the transportation of fertilizer is experiencing difficulties getting from the port to center, so the government has decided to share the transportation of fertilizer and wheat cargo equally instead of the current prioritization of wheat.
Recently, government officials including Gedu Andargachew, Ethiopia’s top diplomat and Dagmawit Moges, Minister of Transport, who paid a visit this week to Djibouti and met top officials including President Ismail Omar Guelleh have talked about the transportation of fertilizer as it is badly needed for farming this rainy season.
Ethiopian transporters based in Djibouti told Capital that recently they have met about the transportation of fertilizer with officials from the Ministry of Transport.
However, the major challenge has been that the tariffs imposed on transporting the product and location has been a concern for some of transporters, according to sources.
“Security in some areas of the country and the tariff has created dissatisfaction in the transporter,” a source at Djibouti said.
A source at one of the transport association in Ethiopia told Capital that price of fleeting fertilizer cargo is significantly lower than the rate for other cargo including commercial cargo.
For instance, transporting a product from the port to Addis Ababa is about 140 birr per quintal but now the offer has reached up to 220 birr for commercial transportation to the same destination. This is the reason why transporters are not interested in transporting fertilizer. “For instance transporting fertilizer to Bahir Dar is at least 10,000 birr less than conventional cargo,” an operator at one of the transport associations told Capital.
“For instance the problem occurs every year but the government organizes the procurement and arrival of products at port in a different period. The current case is the national interest and the benefit of the country that needs priority over other cargos due to that the truck owners should cooperate for the sake of mutual benefit of the country,” the source commented.
The major disagreement is that the government forced other transport associations besides those, who won the bid to transport the fertilizer, at the same price that the bid winners offered, according to sources, while the majority of the transporters are moving the product even though they are not happy.
“I don’t know about other associations but our trucks are fully engaged in the transportation of the fertilizer,” one of the transport association representative based in Djibouti told Capital.
This similar source claimed that the main problem is occurring when the improper and non certified transporters win the bid to move the product. “If the company or associations who have ample capacity won the bid, the burden will be managed by themselves,” the source added.
Experts stated that another major challenge in the sector is corruption. They stated that if one transporter pays some amount for those who organize the fleet at Djibouti they get a special gate pass allowing them to transport other cargo. “The government has to work strongly to improve the sector which is basic for the country’s economic activity,” they told Capital.
One of the association leaders told Capital that in the past couple of weeks the top management of Ministry of Transport has met with representatives of the association to accelerate the fleet of the cargo from the port. “But in real terms and to get a solution the ministry should meet with owners instead of association leaders, who are not decision makers like owners.”
A source at Djibouti said that currently DAP fertilizer, which is needed during the early farming stage, is transported and the next cargo will be urea fertilizer which is very difficult to load and transport.
Sources at Dry Cargo Transporters Federation said that about five vessels carrying fertilizer mainly urea are expected to come to Djibouti and one of them arrived last Friday and the other today, while Capital was unable to get the exact volume transported to Ethiopia. The others will arrive in the coming week, according to sources.
For the mess all of the sector actors are putting their finger on the operation and advising the government to look itself. They also suspect that there is political and economic sabotage regarding this problem that can be solved. “There is significant corruption in the sector that the government has been unable to tackle,” experts said.
The fertilizer cargo initially projected to be fully transported by the first week of June, has now been pushed by two weeks.
Currently Federal Police in collaboration with the regional police administrations is working to enforce cross border trucks that are working locally to go to Djibouti to accelerate the shipment of fertilizer.
At a meeting held on Friday May 31 between the transporters and relevant government officials chaired by Abdissa Yadeta, Director General of the Federal Transport Authority, the stakeholders agreed to give equal priority to both fertilizer and wheat, but the exact date when wheat will be included in the new scheme was not disclosed.
There is a great deal of wheat cargo at the port and more vessels carrying wheat have arrived at Djibouti.
Sources who are close to the case said that the Director General stated that the wheat will get similar attention as fertilizer. “The government has decided wheat will get the same attention and this will be announced in the future,” Abdissa told participants during the meeting held on Friday afternoon.
On average 193 trucks travel to Ethiopia every day carrying fertilizer, but sources at Djibouti said that trucks who have a fertilizer gate pass may wait from five to 10 days to be loaded.
Capital has tried to talk Dagmawit Moges and Abdissa Yadeta, Director General of Federal Transport Authority, via phone but was unable to get a comment.
Last week Capital reported that the government’s order to prioritize fertilizer over wheat, when being transported from the Port of Djibouti to Ethiopia has meant increased demurrage costs for wheat cargo and delay in getting wheat to the local market.
Sources say a huge amount of wheat has been stored at the port in Djibouti called Doraleh Multipurpose Port (DMP). Currently the wheat transported to the centre is about 20 percent of what was expected.
Figures indicated that the country has 14,500 cross border trucks, while on the recent re-registration so far only 10,400 trucks are registered.
Ethiopia Trading Business Corporation (ETBC) claimed that the wheat that it ordered remained at Djibouti because trucks gave priority to fertilizer. The wheat is mainly distributed to stabilize the market and supplied to basic institutions like higher educational facilities.