Feb 19 , 2022

Transport associations engaged in commercial services will be registered as businesses should a bill tabled to Parliament last week pass. A bill drafted by the Ministry of Transport & Logistics (MoTL) has been forwarded to the standing committee for Urban Infrastructure & Transport Affairs, which also motion Parliament to establish a new federal commission.

The bill comes as an amendment to a law passed in 2005. The draft excludes railway and sea transport modes mentioned as "other laws", such as a proclamation approved in 2017 to govern rail transport.

This is not the first attempt by the authorities to force associations to re-establish as commercial entities. Last year, experts at the Ministry of Transport drafted a directive with similar intentions, though judges at the Federal High Court later suspended the directive following pleas by the Transport Employers' Federation. The Federation is comprised of 54 associations and over 9,000 members.

These associations comprise a group of truck owners; an association must enlist at least 75 vehicles. However, their role is overlooked in any logistic or transport policies.

Yosef Alemu, general manager of Elshaday Cross-Border Transport, says it would be ideal to transition into a formal commercial entity but argues the timing of the amendment could not be more off.

"I'd like to see it changed," he said. "But it's not the right time."

Other associations have taken the hint and began reorganising into share companies. Among them is Yegna Hilm, which operates 180 vehicles. It has been incorporated as a share company, floating shares to its members and the public. Dejene Luche is the general manager of the Association and also serves as head of public relations for the Transport Employers' Federation. He believes the authorities are making the right move by abolishing transport associations.

"You can't take out loans as an association and grow your business," says Dejene.

However, he emphasises the need for a transition strategy to ensure the well-being of the transport sector. Dejene foresees that the biggest challenge will be persuading associations and members to make the shift.

Engida Hailemariam, working in the industry for 17 years, has a different opinion. Serving Kokeb Transport Association as a general manager, Engida believes the industry is more complicated and unwell than it appears. An absence of organised operations, lack of proper auditing and weak regulatory works undermine the sector, according to Engida.

"Associations have been playing an important economic role and supporting many members, but it doesn't mean they're perfect," he said.

Engida warns that clearing audit issues is key to a successful transition, though the process could be drawn. It is unlikely to wrap up in the six-month time stipulated in the draft proclamation, says Engida.

Officials say a legislation introduced over 17 years ago has provisions no longer relevant, hence an amendment.

"A look into the proclamation reveals that it cannot accommodate the economic and political changes the country has gone through," reads the briefing provided to Parliament.

One glaring case is that provisions for establishing the Federal Transport Authority, which ceased to exist as part of the administration’s reshuffling last year. The Authority was tasked with enforcing government policies, issuing certificates of competency, and manufacturing license plates. It was tucked, with all its duties transferred to the Ministry of Transport & Logistics.

The motion presented to Parliament also proposes the establishment of a new federal institution dubbed the “National Road Transport Commission.” Officials say the Commission is necessary to strengthen transport interconnection with neighbouring countries and accommodate the transport needs from economic growth and expansion. The Commission has been tabled as a replacement for the defunct Transport Authority. However, the draft fails to provide details on its duties.

Eshetu Temesgen (PhD) is an MP who serves the standing committee for Urban Infrastructure & Transport as a deputy chair. He was among the 312 MPs who attended the session last week. He says the Committee will begin to look into the bill starting next week.

"We'll be looking into it with the Minister [of Transport]," he told Fortune.

Some of the Committee's members have raised concerns over differences between the proclamation and the motion presented to Parliament. They inquired whether the formation of a new Commission would go against the administration’s restructuring bill introduced last year, which was an attempt at downsizing the growing number of federal agencies.

PUBLISHED ON Feb 19,2022 [ VOL 22 , NO 1138]

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