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A bill allowing for private operators in the transport and delivery of import and export goods is to be debated by stakeholders on Tuesday, August 17, 2010.   The Ethiopian Maritime Affairs Authority (EMAA) produced the bill, which requires potential multimodal transport operators (MTOs) to be established with a capital of at least 10 million Br, to encourage competition between private operators and the Ethiopian Shipping Lines (ESL), which currently is the sole operator. The potential operators are also required to have at least two agents in at least two foreign countries.   A letter of notice signed by Mekonnen Abera, director general of the EMAA, was sent to 15 stakeholders including the Ministry of Transport and Communications (MoTC), Ethiopian Shipping Lines (ESL), and Ethiopian Freight Forwarders and Shipping Agents Association (EFFSAA), on August 9, 2010. Each stakeholder should send 10 delegates to the workshop on Tuesday and forward their comments, the letter requested.  

MTOs are persons or companies that conclude a multimodal transport contract with the consignor or a carrier for the former to undertake all responsibilities as far as transporting goods via various modes. The MTO acts as the principal and not as an agent, even though it can subcontract part of its responsibilities to another party.   The potential operators may or may not operate their own vessels; they can get a licence if they present the 10 million Br capital requirement, with 25pc deposited in a blocked account in the name of the company, according to the draft. It also requires that the main office of the company be located in Ethiopia. The number of agents the operator has is expected to grow to five in as many years.   MTOs are to be strategic partners with the Dry Ports Enterprise.   “The establishment of dry ports and their strategic partners, MTOs, is crucial for the multimodal system to work properly,” Mekonnen said.   Modjo and Semera dry ports have already started operations with ESL as the sole MTO.  

One of the reasons for drafting the regulation is to create competition in the market, according to Mekonnen, in which the ESL is operating as a monopoly at the moment.   “It invites the private sector to engage in such activities, which, in the end, will be a means to achieve efficiency,” Mekonnen said. “The other reason is to have other MTOs fill the gap in the transport of export goods, which ESL currently does not cover as much as imports.”   The draft is also intended to create a regulatory mechanism for MTOs whose role in the import and export is of great significance as a company has to be creditworthy and knowledgeable to do this job, according to Mekonnen.   The EMAA expects this draft to encourage local companies to become MTOs and allow international MTOs to enter the market once the local operators have become stable and competitive.  

The multimodal integrated tariff and freight rates offered by the MTOs will have to be valid for at least three months, if the draft gets its way.  Inbound cargo ocean transport will also have to be subcontracted to ESL, unless a waiver is given by the state owned monopoly.   Both vessel and non-vessel owning operators established by foreign subjects are prohibited under the draft law from rendering service for land haulage in the transit corridor, which is only reserved for Ethiopian subjects, directly by themselves.

Source http://addisfortune.com