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(The Reporter Ethiopia) Shipping, logistics company hopeful of securing Massawa’s port operation

Posted by: Semere Asmelash

Date: Sunday, 09 September 2018

Shipping, logistics company hopeful of securing Massawa’s port operationPort of Massawa

Shipping, logistics company hopeful of securing Massawa’s port operation

8 September 2018
By Yonas Abiye

Welcomes government’s decision to liberalize transport, logistics service

The state-owned maritime monopoly, the Ethiopian Shipping and Logistics Service Enterprise (ESLSE) said that it is optimistic of winning a tough competition to take over the Eritrean Port of Massawa which has not been offering regular operations.

The Port of Massawa has been a well-equipped and a well organized facility but it has not been offering regular services for years.

Roba Megerssa, CEO of ESLSE told The Reporter that “Now, ESLSE is considering fertile grounds on the port with a view of expanding business opportunities and marketing destinations for its shipping and cargo services.”

He further explained that his enterprise hopes to take over the port after Prime Minister Abiy Ahmed (PhD) visited Eritrea on Wednesday whereby the latter held discussions with President Isaias Afeworki.

PM Abiy who has made his second visit to Asmara in two months, also told local media that he had “a successful bilateral discussion” with President Isaias in regards to port services and overall, the bilateral discussions in business and economy.

According to Roba, currently, ESLSE faces competition with companies from other companies who are also competing for the ports operation bid. But he expects ESLSE to be the final winner.

Besides the ports service, the enterprise has already identified further opportunities including shipments of Eritrean export items as well, the CEO told The Reporter.

Asked whether the enterprise will make purchases of cargo ships in advance, Roba disclosed that there are no plans of purchase. “But in line with business and economic opportunities we have over time, we might be required to go to the market to purchase new ships. This of course is decided upon the findings of the market feasibility study to be carried out through time.”

He further indicated that should there be an immediate need of new ships; the Enterprise would need to have one – particularly a cargo carrier for live animal (cattle) shipments.

“Mainly we may need to have this cargo carrier. Because clients want the cattle to be transported directly to their place,” he said. He added that this particular cargo has got double advantages offering cargo shipment services to Ethiopia as well.

“We are looking to acquire this well-organized port facility so that we will enable it regular operation, we are now waiting for the bid result which I believe will be in our favor to win,” he said.

Meanwhile, PM Abiy on Wednesday visited Eritrea’s Massawa and Assab ports. Eritrea’s President Isaias Afeworki welcomed the Prime Minister at Assab Airport.

“Ethiopia is ready to utilize Massawa and Assab ports,” Abiy indicated, adding that preparation works have also been finalized to do so.

Reported by various media outlets, after 20 years, the first Ethiopian commercial ship has docked on Eritrean port of Massawa.

After reaching a peace agreement ending two decades of hostility between the two neighbors, it is to be recalled that on July 9, the two leaders agreed that the ports of Massawa and Assab would be opened for Ethiopia’s shipments at cheaper rates.

For the enterprise, Sea Transport Services is the major service provided by the Shipping Sector to provide Coastal and International Marine Transport services to and from Djibouti Port through the Ports of: the Gulf and Indian sub-Continent, China, Korea, Japan, Singapore, South Africa, and Indonesia.

In a related news, the enterprise has welcomed the decision of the government which announced the opening of local logistics and transportation services for foreigners.

Asked if the coming of foreign companies to the sector poses a threat for the enterprise that dominates markets, the CEO responded that it brings more blessings than a curse.

“It may be a bit difficult to say much in detail about this decision of the government as I am not part of that decision. However, I don’t see any negative impacts on our business; rather, I believe that it would bring more opportunity since we can learn from the experience of foreign companies. As it is known, we currently face lack of competency or capacity which usually makes the service very inefficient.”

He further told The Reporter that “the presence of foreign companies would enable us forge a partnership through time. This will also help us strengthen our capacity while it paves the way in our endeavor of realizing the privatization process.

Explaining the blessings of the decision, Roba said that his enterprise would be able to compete in the maritime export business citing the Enterprise has almost zero percent share in the market.

“We have almost no share in the export shipment market. Our main business mainly lays on export forwarding market. We have 66 percent of local forwarding export up to Djibouti Port. Hence, the coming of foreign companies will help us gain a better capacity that would lead us to join the export business in addition to the 3P service,” he added.

It was on Tuesday that the Ethiopian Investment Board announced that it has lifted the restrictions imposed on the logistics industry exclusively reserved for Ethiopians such as packaging, forwarding and shipping agency services.

The decision by the Board also opened the provision of bonded warehouse, consolidation and deconsolidation services and allowed a joint venture participation of international logistics service providers holding up to 49 percent or less stakes.

In a statement it issued, the Ethiopian Investment Commission said its decision is significant as it will improve the provision of high-end logistics services while local firms acquire world class knowledge, expertise, management, and systems by working jointly with globally reputed logistics service providers.
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