Aug 7 , 2021

The Federal Transport Authority has suspended permit renewal services for freight operators following an order from the Federal High Court.

Earlier this year, the Court had passed an injunction on a directive introduced late last year, imposing new guidelines for issuing and renewing permits for the freight vehicle business. Now, officials at the Authority say they have no way of providing these services, as the directive previously in use has been rescinded while the recent is invalid under the court order.

The suspension will disrupt the freight transport sector with 13,000 trucks and affect nearly 100 associations, many of whom depend on cross-border transport as a major source of income.

The directive was drafted with officials claiming to encourage the categorisation of trucks under share and private limited companies, foster and improve efficiency in the transport sector. However, the changes drew heavy criticism from players in the industry, who claimed it would do nothing but disband transport associations in place with little to show in terms of benefits.

In February this year, this and qualms with specifications about payload capacity requirements led the Transport Employers' Federation to take their misgivings to the High Court; Judge Haregewoyn Teklu ordered the directive suspended until further ruling.

"The Federation went to court and got the directive suspended," said Alemayehu Welde, head of the office in charge of licensing cross-border operators at the Authority. "Now they're complaining these services have been stopped."

Over 40 associations under the Federation, which comprises 54 associations and over 9,000 members, are livid with the suspension of services, claiming that they are not able to bid on a tender floated by the Ethiopian Shipping & Logistics Service Enterprise (ESLSE) for the transport of sugar from the Port of Djibouti later this month. Transporters need to have valid permits to participate in the bid.

"We're still waiting to get our permits renewed," said Aregawi Girmay, the International Cross-Border Transport Association manager, which plans on participating in the bid. "If they don't renew, we'll just go ahead and submit our bid with the old permits."

Representatives of the Federation claim that they have filed an appeal with the Enterprise, pleading that associations submit bids even with expired permits.

"Not allowing associations to participate in the bid will have negative effects for the country as a whole," said Dejene Luche, public relations head for the Federation.

However, officials at the Enterprise say no such appeal from the Federation has been received.

Officials at the Transport Authority remains adamant that they can do little except wait for the court's final ruling before commencing renewal services. However, it remains unclear when exactly that would be.

"We can't allow it before then," Alemayehu told Fortune.

According to Yohannes Woldegebriel, a legal expert who had served as an attorney for customs authority, transport associations should not be allowed to participate in bids in the first place. These associations do not hold trade licenses themselves; only their members do, making them ineligible to participate in competitive bidding processes, Yohannes said.

"They're non-profit organisations," said Yohannes.

Due to a new digital registration system, freight transport operators are also enveloped in another feud with the Authority. Developed in collaboration with the Innovation & Technology Institute at the cost of 30 million Br, the integrated management system includes interfaces for fleet management, online payment, and biometric enrollment. Operators are expected to submit trade licenses, vehicle deeds, performance evaluations, driver employment contracts, insurance documents, and fleet management plans to register online.

However, many operators have resisted the registration, claiming that the new requirements are exaggerated and the process too complicated.

PUBLISHED ON Aug 07,2021 [ VOL 22 , NO 1110]

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