Nov 27 , 2021

The Ministry of Transport & Logistics is to delegate part of its roles to the private sector, including vehicle license plate production and distribution to regional offices.

Issuing licence plates was interrupted after the Federal Transport Authority, an executive organ under the Ministry, dissolved in October as part of a government restructuring. The restructuring includes folding and reassigning six of the 10 federal agencies that used to operate under the auspices of the former Ministry of Transport.

Several vehicle owners have been inconvenienced by the disruptions, according to Haile Belay, head of Unique Cross-Country Vehicle Owners' Association.

The production of plate numbers is being transferred to the private sector once structural reorganisation at the Ministry is completed, disclosed Abdulber Shemsu, deputy head of the former Federal Transport Authority.

“The Ministry will focus on regulatory services,” he told Fortune.

Officials of the Ministry want to continue to oversee fees vehicle owners are charged for the outsourced services and retain the assignment of license plate numbers. The Ministry has temporarily delegated the duties to one of its four remaining executive organs - the Public Service Transport Service.

Vehicle owners, however, are not to directly approach the Service but their respective regional and city administration transport bureaus, which then charge the drivers fees after adding administrative costs. The Authority used to charge the bureaus between 574 Br and 677 Br for the aluminium plates depending on size. The Addis Abeba Transport Bureau, through its branches in the districts, charges vehicle owners a combined fee of around 5,000 Br for the provision of new plates, deeds, third party insurance, and for issuing annual vehicle inspection certificates.

The Public Transport Service has prepared nearly 5,000 plates after the mandate was temporarily transferred to it recently. The Ministry says sufficient materials are available to produce around 1.5 million license plates. Close to 1.3 million vehicles are on the country's roads, according to the latest data from the Ministry.

Haile of the Association hopes to see the private sector do a better and more efficient job in license plate production. It will end malpractices at government offices, according to him.

"The sector has a reputation for rent-seeking," he said.

The Ministry should be a regulatory body that should not involve in service provision, according to Matiwos Ensermu (PhD), associate professor of logistics and supply chain management at Addis Abeba University.

“It should focus on logistics,” said Matiwos.

Dagmawit Moges, minister of Transport & Logistics, echoed the same view last week while briefing the media.

“The government shouldn’t engage in every activity,” she said.

More services handled by the Ministry will be outsourced shortly, disclosed the Minister. These include certification of technician competency and provision of temporary vehicle plate registration, renewal, and replacement.

The liberalisation of services such as license plate manufacturing is only a small step compared with the government's actions to empower the private sector and limit itself to regulatory activities, according to Birhanu Zeleke (PhD), a transport management expert teaching at Kotebe Metropolitan University.

“Beyond the small services like these, the private sector is capable of handling bigger activities,” he said.

PUBLISHED ON Nov 27,2021 [ VOL 22 , NO 1126]

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