The most modern port in the region, Doraleh Multipurpose Port (DMP), has announced that it will officially commence the link with Ethio-Djibouti Railway Line in the beginning of the coming New Year.
The port, which is the biggest not only in Djibouti but in east Africa, has officially started operation in June 2017. So far it has provided the best services to clients mainly for Ethiopians, according to Wahib Dahir Aden, CEO of DMP, who met Ethiopian journalists this month.
The railway line will be connected in the near future. “The work from the other port called SGTD or the former DCT, container terminal, has already started to connect with our port,” the CEO said.
“The first lines will be connected initially in the coming two months,” he said.
“In this port we have a capacity of accommodating a big vessel of dry bulk, for instance a vessel with 80,000 metric tons of dry cargo arrived at the port for the first time and this reduced costs,” the CEO explained. The arrival of these huge vessels with a big carrying capacity means from five to USD 7 less per ton for the clients. The port with its naturally high depth is considered as one of the best in the port industry.
Big vessels are the game changers in terms of significant reduction of costs and would accelerate the land fleet with the line that will be connected in the coming months. according to the top official.
Last fiscal year RoRo cargo declined because there were not as many active importers, the CEO explained. For the past budget year due to the hard currency shortage in Ethiopia the rate of cargo has gone down. The CEO said that the fleet via his port is maintained except for the vehicles. He added that the hard currency shortage and the political instability during the past period did not affect the DMP business.
He said that the port has changed the whole process of the logistics chain in Djibouti and also for final customers that are Ethiopian import, export actors.
“It makes things more smooth and efficient than before. For example the truck arrangement is done prior the arrival to the port and the vessel arrival,” the CEO said. This has allowed the truck and vessel’s stay to be shorter than before which reduced unnecessary extra costs, according to Wahib Dahir.
In 2018 the port has handled five million tons. “The reports we get from the major liners like Messina and Ethiopian shipping, and forwarders were very good which shows the operation was successful,” the CEO said.
Doraleh Port to link with Ethio-Djibouti rail
Industrial park exports below targets
Five industrial parks located in Bole Leme, Hawassa, Mekele, Kombolcha and Killinto have a combined export income of nearly USD 85 million. Each company on average at the industrial parks exports a little less than USD 2.8 million annually. The government spent USD 780 million to construct the industrial parks so they are disappointed that income has not met expectations so far.
The parks have over 65,000 workers and 180 companies most of which export textile products.
Temesgen Tilahun, deputy head of Industrial Parks Affairs at the Investment Commission says that income will increase as challenges are dealt with.
“Don’t forget that we are beginners when it comes to industrial parks, we have to do a lot, we have a lot to learn, more foreign companies are interested in coming and working in the park sheds which will increase our exports.”
One thing that may help is making it possible for industrial parks to create their own power.
“Honestly speaking there is a power shortage in the parks which means the companies underperform so we have to solve this while at the same time adding more parks to create more job opportunities,” Leslie Neme, CEO of the Industrial Parks Development Corporation
She added that the Industrial Parks Development Corporation is researching methods to allow companies to generate power on their own.
International brands like Levi’s, Gap Outfit, TESCO, PVH, and Tal apparel have already set foot in the developed industrial parks and are exporting their products to the global market.
Recently, Dire Dawa and Adama Industrial Parks completed construction and one has started in Adama. Two industrial parks are being built by CCECC at a cost of USD 190 million and USD 12 million respectively.
Another issue is low salaries many workers are paid less than USD 40 per month, the minimum wage in many US states is USD 15 per hour.
Industrial Inputs Enterprise short of fund
The Ethiopian Industrial Inputs Development Enterprise (EIIDE) is struggling with a shortage of funds. They are also asking the government to fill their leadership position.
The enterprise changed its name and revamped its main goal about five years ago. Its mission is to support the manufacturing sector by supplying industrial inputs. Currently they are complaining about financial problems as a result of uncollected credits. They also have not received an expected settlement from the Ministry of Finance.
The public enterprise has also been running without a board of directors because the previous board of directors were dissolved.
Wondale Habtamu, the recently appointed CEO of EIIDE, said that his enterprise is working to collect uncollected credits.
The enterprise supports the industry sector so EIIDE has provided financing for suppliers in advance. This includes items like: textiles (partially completed), leather products and cotton. They have also sold rebar through a bank guaranteed bond. Now they are trying to retake the payment from three buyers.
Just from rebar, cotton and leather the enterprise is looking to collect 78 million birr, 182.5 million, and 30 million birr respectively. “In general we have 300.7 million birr uncollected from different suppliers and buyers,” Wondale told the standing committee of the House of People’s Representative.
He said that EIIDE has 104 million birr from Ayka Addis, the largest textile factory in the country. It is being controlled by the Development Bank of Ethiopia after its over one billion birr debt default by the investors from Turkey.
He said that when the enterprise was first established it was supposed to be paid 792 million birr by the Ministry of Finance in paid up capital but that has yet to happen.
“Furthermore, we spent 596 million birr to purchase sugar to stabilize the market. This should have been refunded by the ministry but they have not paid,” he added.
According to the CEO, in total the enterprise has unsettled payments of 1.7 billion birr. This affects the activity of EIIDE.
He said that from the uncollected sales 55.3 million birr was collected in the first five months of the budget year. “We are trying to collect the additional 300.7 million birr through legal negotiations,” he added.
According to the report he presented, the enterprise has handed some cases through civil courts and others through criminal courts.
The enterprise appeared at the standing committee of the Trade and Industry on Friday December 28 saying that they have been unable to access loans from bank because their solvency has not met standards. “Based on the current status we cannot get a loan because some of the registered assets exist in Eritrea which separated from Ethiopia in 1993.”
In the stated period EIIDE had a goal of making transactions worth 1.5 billion birr. In reality they have only made 394 million birr worth of transactions which is 25 percent of their target.
The enterprise earned 8.9 million birr in sales profits before tax but their goal was 24 million birr.
EIIDE replaced the former Merchandise Wholesale and Import Trade Enterprise (MEWIT), when it split into two.
MEWIT managed 86 branches at the time. Now EIIDE manages 37 branches throughout the country.
“We have been trying to repossess our properties which are currently being controlled by city administrations or regions but we have not been able to,” he said.
The enterprise, which was established in 2015 via the regulation no. 328/2014 is one of the biggest public enterprises. It has a huge amount of procurements from local and overseas markets.
In the past experts who closely follow the enterprises argued that in fact EIIDE was established to support industrialization by supplying industrial inputs. However, this did not work out as expected. Most of the materials went to project MEWIT oversaw. An example of this is rebar sales. The new CEO also stated that in the past the organization did have a strategic plan or a leader, “We are now engaged restructuring the organization and have developed a strategic plan,” he said.
Disagreement between the former management and employees was one of the challenges that the enterprise faced. In addition there were several misdemeanors the staff complained about. There was also a problem with leasing the head office. However, now they have their own office in Piazza which is in the heart of the city. Formerly it was the head office of MEWIT.
The current CEO disclosed that the problem between management and the staff has been solved. He also said that the head office has been relocated to Piazza, which is a more central location for employees than their former headquarters located south west of Addis Ababa in front of the Vatican Embassy. “We were able to save 14 million birr since we left the rented building,” the CEO said. Employees suspected that the former management leased another building in relationship to a network in order to benefit themselves. They said that the former head office was rented to others and then the organization rented another plot, which is not located in a suitable place for employees.
Late last budget year the former CEO Asfawossen Alene, who is the founding CEO and his deputy Abay Kebede left the country. Later on they sent a resignation letter.
In his report Wondale also mentioned the situation about the former heads. He said that in relation to the rebar credit sales there is suspicion about the top leaders and the former head of the warehouse, which his where about for the last several months is unknown, involvement that police is investigating.
He asked support from the standing committee and the parliament to accelerate the investigation in order to settle the case as fast as possible. There is a suspicion about the existence of one rebar buyer and the bank bond. They are unable to determine if it is phony or not. Three buyers have been involved in rebar credit sales.
Early this budget year Melaku Alebel, who served as the Minister of Trade, replaced the former board chairman, Mebrahtu Melese (PhD). Now, however, there is not a board chairperson to follow the enterprise. This was recently discussed by a standing committee chaired by Getachew Melese. Getachew said that the committee will work with the Ministry of Trade and Industry to obtain a board of directors.
Wondale further told Capital that the absence of board has affected the enterprise’s activity. “We have several decisions that needs a green light from of the board,” he added.
Other board members, Ahmed Tussa, former state minister of Finance that is now transferred to Oromia region and Wondu Legesse, former head of Leather Industries Development Institute, left the board membership.
“I have written a letter regarding the issue to the Minister of Trade and Industry, and it has informed us that the enterprise will get new board chair in the near future,” he concluded.
Factories killing Awash River
The discharge of chemical waste from factories along the outskirts of Addis, Modjo, and Adama are increasing the Total Dissolved Solid (TDS) amount of the Awash River which is killing aquatic animal life and harming irrigation systems along the river.
A recent study conducted by the Environment, Forest & Climate Change Commission, Ethiopia –(EFCCC) indicated that factories in Addis, Adama and Modjo are the major pollutants of the river by discharging untreated chemicals and sewerage.
TDS is a measure of the dissolved combined content of all inorganic and organic substances present in a liquid in molecular, ionized or micro-granular suspended form.
According to the study there is a high amount of TDS around Beseka Lake which is a source of water for the Awash River. The area around Awash Fountain, Modjo River and Adaitu are the places that are discharging a high amount of acid and salt into the river.
Because of the pollution, some farmers in Afar are shifting their irrigation lands to escape the high amount of salty water from the river and some fish in the river are in danger because of the high amount of solid pollution in the Awash River.
Hundaol Gemechu, water pollution expert at EFCCC told Capital that the factories have been warned to stop putting chemicals into the water but those warnings are often ignored.
“A constant level of minerals in the water is necessary for aquatic life. Changes in the amounts of dissolved solids can be harmful because the density of total dissolved solids determines the flow of water in and out of an organism’s cells. Many of these dissolved solids contain chemicals, such as nitrogen, phosphorous, and sulfur, which are the building blocks of molecules for life.”
“Concentration of total dissolved solids that are too high or too low may limit the growth and may lead to the death of many aquatic organisms. High concentrations of total dissolved solids may reduce water clarity, which contributes to a decrease in photosynthesis and lead to an increase in water temperature. Many aquatic organisms cannot survive in high temperatures. Discharge of pollutants into rivers or any aquatic environment can change aquatic species diversity, abundance and ecosystems, due to their toxicity and accumulative behavior”.
He added that over the last decade huge scale usage of chemicals in various human activities has grown very rapidly. The industrial and domestic effluents are released directly or indirectly into the large water bodies.
Awash River in eastern Ethiopia, rises on a steep northern escarpment of the Eastern (Great) Rift Valley and is fed by Lakes Shala, Abiyata, Langano, and Ziway. Cotton is grown in the fertile Awash River valley, and dams (notably the Koka Dam, 1960) supply hydroelectric power. Herds of antelope and gazelle live in the Awash National Park. The river ends in a chain of salt lakes in the Denakil Plain, after a northeasterly course of about 750 miles (about 1,200 km).
