Monday, May 20, 2024
NewsState shipping monopoly awaits gov’t decision on ETB 1.7 billion owed by...

State shipping monopoly awaits gov’t decision on ETB 1.7 billion owed by former MetEC

Executives of the Ethiopian Shipping and Logistics Services Enterprise (ESLSE) await a government decision on 1.7 billion birr in outstanding receivables from the former Metals and Engineering Corporation (MetEC).

The sum was accumulated for goods and services provided by ESLSE to the military conglomerate between 2011 and 2018. MetEC was restructured into the Ethio Engineering Group (EBG) following the political transition in 2018.

However, heads of EBG say they are unable to settle the receivables inherited from MetEC and the Office of the Prime Minister has instructed the Ministry of Finance to clear the enterprise’s books.

A source at ESLSE told The Reporter the Office of the Prime Minister has instructed the Ministry to clear 1.7 billion birr from EBG’s books.

“We’re awaiting a response from the Ministry. If it has the funds, it will repay the 1.7 billion birr. Otherwise, it will order the Liability and Asset Management Corporation to soak up the amount,” said the source, who spoke anonymously.

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On April 17, 2024, the parliamentary standing committee for government expenditure scrutinized heads of ESLSE following an auditor general’s report on the enterprise. The report highlighted ESLSE’s vast uncollected payables, among which are accounts belonging to EBG.

ESLSE execs attempted to save their skins by arguing that most payables have been collected barring those owed by EBG.

“It’s widely known that EBG has been going through difficulties in the last few years. It is the major factor behind the uncollected payables. We’re expecting decisions from the Ministry of Finance,” Siraj Abdullahi, deputy CEO of the state-owned ESLSE, told MPs.

A little over 507 million birr of the total uncollected payments from EBG are due for demurrage costs, while a whopping USD 209 million is outstanding for shipping costs, and an additional 83 million birr for transit costs. The auditor general’s report reveals the logistics giant failed to collect close to 650 shipping containers it had provided to EBG.

Heads of ESLSE told the standing committee the enterprise is preparing to implement a new organizational structure approved by the Ethiopian Investment Holdings (EIH), the sovereign wealth fund that oversees the state shipping firm.

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