Sunday, July 21, 2024
NewsFed prepares strict requirements for potential private dry port developers 

Fed prepares strict requirements for potential private dry port developers 

The federal government has drafted legislation that introduces stringent requirements for private dry port and logistics terminal developers looking to make an entrance into Ethiopia’s state dominated logistics sector.

The draft is part of a 10-year strategy to liberalize the logistics sector, and accompanies government introduced initiatives to award multimodal transport licenses to foreign or local investors. 

Several investors have been bidding for a license that would see them fight for market share with the state-owned giant Ethiopian Shipping and Logistics Services Enterprise (ESLSE), but, despite several tenders, there has yet to be a single license awarded.

The Ministry of Transport and Logistics has now come up with a draft directive to provide the legal frameworks on which foreign and private investors can take part in dry port and terminal development as well as service provision.

The draft directs investors wishing to develop a dry port to first identify a location near transport infrastructure connected to a sea port. Close government supervision, requirements for various kinds of machinery and equipment, as well as the inclusion of a logistics hub, logistics park, and terminal are part of the terms introduced for potential dry port developers.

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A former State Minister for Transport and Director-General of the Ethiopian Maritime Authority (EMA), Yehualashet Jemere (Eng.) was among the senior officials who worked on legal preparations for the government’s initiative to liberalize the logistics sector.

He explains that during his tenure at the Authority, he consulted with officials at the Finance Ministry to introduce provisions to include private dry port developers and other logistics sector actors in the investment incentive regulation revised two years ago. 

“We made sure that investors in various logistics businesses, including dry ports, were included in the investment incentives,” he told The Reporter. “The idea was to awaken the private sector to engage in this business.” 

According to the directive, a dry port and terminal must include a logistics hub, logistics park, and special terminal. 

A logistics hub should sit on a plot of at least 80 hectares, 34 of which are to be dedicated to various terminals, including container terminals. The hub is also expected to have space to park at least 100 heavy trucks.

The directive sets the minimum size for logistics parks at 33 hectares, four hectares for an intermodal terminal, 1.5 hectares for vehicle terminals, three hectares for consolidated cargo, two hectares for dry bulk cargo terminals, and an additional 2.5 hectares for container cargo terminals.

Yehualaeshet, who now works as a private consultant, observes the stricter requirements are likely meant to ensure high standards and smooth cargo flow.

“Dry ports are expected to have improved facilities,” he said.

 

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