New Trucks to Force Competition in Transport

By ISSAYAS MEKURIA - FORTUNE STAFF WRITER

13 September 2006

Owners of freight transport trucks are signing a petition in protest of the Ethiopian government’s decision to allow MIDROC Derba Plc. to import 800 trucks duty-free for transporting cement.

Out of the 1,200 truck owners working in the transport sector, 300 owners have written a letter protesting the permit issued by the government to MIDROC Derba, which allows them to import the trucks.

In order to alleviate the shortage of cement in the country, the Ministry of Trade and Industry (MoTI) gave MIDROC Derba the go-ahead on the importation of 1.5 million tons of cement into Ethiopia; the agreement between the Ministry and Derba was signed on June 30, 2006.

At the time, because it was believed there would be a shortage of transport vehicles to transport the cement from the port to inland Ethiopia, MIDROC Derba was given permission to import 800 transport trucks of its own for this purpose.

“We are currently faced with a shortage of cement, not a shortage of transport trucks; instead of permitting the importation of all these trucks, why can the government not come up with a plan that will benefit both parties,” said an executive member of a transport truck owner’s association. According to him, there is still time for them to call on the government to revise its decision.

With this intention, the transport truck owners are signing a petition stating that MIDROC Derba should only import half of the intended 800 transport trucks. This would allow the remaining transport truck owners in the country to receive their share of business.

Fortune ascertained that of the 35 transport truck owner’s associations in the country, 20 have signed the petition. However, the remaining 15 own the majority of the country’s transport trucks.

“The freight transport trucks that are available in the country do not even suffice when there is a small rise in the amount of cargo coming into the country, leading to goods being amassed at the port of Djibouti,” a high-ranking official from MoTI told Fortune, stating that the complaints raised by the truck owners were unfounded.

The official recalled that three months ago, food aid, fertiliser, and metal for construction imported by the Addis Abeba City Administration Housing Development Agency were delayed at the Djibouti port, due to the unavailability of transport vehicles.

“Had we not used vehicles from the Ministry of Defence to solve the problem, we would have faced great problems,” he said.

In January 2006, when a great amount of cargo reached the Djibouti port, the Ministry of Defence had to provide 100 of its vehicles for the transport of the freight to inland Ethiopia.

An authority on federal transport told Fortune that at the time, the freight that had reached Djibouti did not weigh more than 200,000 tons.

“It’s a joke that truck owners that were not able to move this quantity, now tell us that they can transport a load weighing 1.5 million tons,” he said laughingly.

Fortune was not able to obtain comments from MIDROC Derba.