Ethiopia's first Dry Port at Mojo to Start Operations in Few Weeks

07 April, 2009

Fortune - A Dutch maritime company based in Rotterdam, Steder Group B.V. Liner Agency, will takeover the management of Ethiopia's first dry port facility put up on the outskirts of Mojo town, 73Km east of the capital, in just a week.

Officials at the Ethiopian Dry Ports Enterprise (EDPE) struck a deal with managers of Steder last month for the latter to manage the facility for the next three years. The agreement signed, on March 6, 2009, would require the company that has taken the management contract to import heavy-duty equipment - such as gantry crane and large forklifts - worth 1.8 million dollars through its own investment, sources disclosed. The European company has agreed to leave the machineries behind at the end of the contract period, these sources disclosed.

The arrangement would relieve the enterprise from heavy investment in foreign currency, officials of the enterprise believe.

The Federal Government built this facility on a 61hct plot outside of Mojo town in Oromia Regional State.

This facility at Mojo is one of the five projects that followed a study conducted by experts at the Ministry of Transport and Communications two years ago, which concluded that dry ports built in mainland Ethiopia would ease congestion at the port, and save the country from additional warehouse and storage fees. Experts estimate that Ethiopia is subjected to 1.4 million dollars in opportunity cost (each day) for keeping cargo inside the port, while the port auctions goods kept for over six months.

Ethiopia had to pay an extra 22 million dollars in 2008 on top of the 700 million dollars it pays annually in port fees to Djibouti, Reuters reported last week.

Based on the study the Council of Ministers endorsed a year ago, they agreed to the establishment of a state enterprise responsible for the administration of the dry ports and an authority that regulates their operations.

The facility at Mojo was put up at a projected cost of 20 million Br. It is built by the Ethio-Chinese joint venture firm, Norinco-Lalibela Engineering & Construction S.C. (NoRI-LA), and incorporates facilities as good as conventional ports, including customs, packaging, containerization and inland shipment services with two large size warehouses, as well as offices for banks, insurance and maritime transit operators.

Steder, a company that began operations in 1981 as Karl Steder Rotterdam B.V., will assign at least one expatriate general manager, sources disclosed. In the course of the last two decades, about 10 companies have been incorporated in the holding company, Karl Steder Holding B.V., which was reformed in 1989.

The enterprise is planning to establish the second dry port in the town of Semera, 558Km north east of Addis Abeba, which is also the seat of the government of the Afar Regional State. It will follow the same procedure of outsourcing the management contract to a foreign company once construction is completed, sources disclosed.