Ethiopia's Search for a Port
Jan 21, 2006
Author: The Reporter (Addis Ababa)
Ethiopia had two ports (Massawa and Assab) in its former province, Eritrea. After the secession of Eritrea, Ethiopia, one of the poorest countries of the world with a population of 70 million, became a landlocked nation. The Eritrean People's Liberation Front (EPLF), a rebel group that fought for independence for 30 years, controlled Asmara, the capital city of Eritrea in May 1991.
In a referendum held in 1993, the majority of the Eritrean people voted for independence. Consequently, the EPLF, led by Isayas Afeworki, created an independent state. The government of Ethiopia was the first state to give recognition to Eritrea. And that was when Ethiopia lost its ports. However, Ethiopia continued to use Assab as its gateway to the Red Sea even after the independence of Eritrea.
After the bloody border war with Eritrea that flared up in May 1998, Ethiopia turned its face towards Djibouti. Since then, Ethiopia has been dependent on the Djibouti port, 910 km east of Addis Ababa. Ethiopia's annual cargo traffic at Djibouti port totals over 4.8 million tonnes. Ethiopia's cargo accounts for 83 percent of the total cargo traffic at the port.
Djibouti port has the capacity to handle ten millions tonnes of cargo and 500,000 containers per annum. Ethiopia's cargo traffic is a lucrative business for Djiboutians. Ethiopia every year spends more than two billion birr for port service.
"Ethiopians are our most important customers," says Abduorahman Elmi Ismael, resident representative of the Djibouti port in Addis Ababa. "The Djibouti port renders transshipment service to Somaliland and to many other countries. But the Ethiopian cargo traffic is our main business," Abdourahman said.
In a bid to enhance the capacity of the port, the government of Djibouti has embarked on an expansion project. Two years ago, the government commenced the construction of a fuel port at Duraleh, a locality found seven km from the existing port, at a cost of 150 million dollars (US). The new port, which will be used to discharge and distribute petroleum products, will be inaugurated in March. This project is the first phase of the multimillion dollar port development project.
The second phase will be the construction of a container terminal and a free trade zone. "Work on the project will commence in March," Abdourahman said. According to him, the container terminal will have the capacity to handle two million containers per year.
The second phase includes the construction of two roads (one of the roads links Duraleh and the main port and the other one connects the new port to the international road to Ethiopia). Abdourahman said that the total cost of the second phase was estimated at 500 million dollars. He said the new project would be finalized by the year 2008. "Vessels are getting bigger and bigger. And we have to meet the growing demand. That is why we need a new port," says Abdourahman.
Djibouti wants to improve the port service it renders to Ethiopia. "Ethiopians are our good customers. And we always want to give them the best service," Abduorahman says.
Nevertheless, the Ethiopian government led by Prime Minister Meles Zenawi doesn't seem comfortable with Ethiopia's dependency on Djibouti port alone. This can be evidenced by the government's effort to identify an alternative port. In recent years Ethiopian authorities have been assessing the port of Somaliland, Berbera, Port Sudan and the Mombassa port of Kenya. Port Sudan is 1881 km from Addis Ababa and Mombassa is 2077 km from Addis. Berbera port, which is located 964 km east of Addis, is closer than the two ports. The Ethiopian government has shown a vested interest in using the Berbera port.
Somaliland is a country which declared independence from the rest of Somalia in 1990. So far the international community, including the African Union and the United Nations, has not given recognition to the self-declared state. But the problem has not deterred Somaliland from maintaining good diplomatic and trade relations with Ethiopia. Ethiopian Airlines is the only international airline that regularly flies to Somaliland's capital, Hargessa. Ethiopian commercial banks work with the bank of Somaliland. Ethiopian ministers held a series of meetings with their counterparts in Somaliland on the possibilities that Ethiopia could use Berbera port. Officials of Somaliland had expressed their firm commitment to render port service to Ethiopia.
Ethiopia experts drawn from the Ministry of Infrastructure, the Ministry of Revenue, the Ministry of Trade and Industry, the Transport Authority, the Customs Authority and Maritime and Transit Services Enterprise repeatedly visited Somaliland to evaluate the Berbera port. After undertaking a comprehensive study on the port facility and the road condition the officials concluded that Ethiopia can use the port. Haile Assegidie, the Minister of State for Infrastructure, announced that Ethiopia can use Berbera as an alternative port. In February 2005 Haile ordered all the state enterprises to import their goods through Berbera.
The Ethiopian Electric Power Corporation (EEPCo) is the first state enterprise to import its cargo via Berbera. Last November a Singapore shipping-line company, PIL (Pacific International Line), brought the first Ethiopian shipment that belongs to EEPCo to Berbera.
"Ethiopian officials went to Berbera to see the arrival of the first Ethiopian shipment. And they were happy with the safe delivery of the cargo, which was transported to Addis Ababa by trucks," says Abdurazak, Chargé d'Affaires of Somaliland in Ethiopia.
"We are ready to render port service to Ethiopia. We are happy to serve Ethiopians," Abdurazak said. Regarding peace and stability in Somaliland, he said that there was no security problem in his country. "The peace and stability in Somaliland is more dependable than in many other African countries," he Abdurazak. "If there is anyone who has doubts on the security issue, he can go there and see the situation for himself," he added. The Berbera port can accommodate up to six vessels at a time and can handle up to 110,000 tonnes of cargo every month.
The Ethiopian government has a plan to build a dry port in the border town of Somaliland and Ethiopia, Togochale, some 800 km east of Addis Ababa. Damitew Demiss, head of the Federal Customs Authority, said that the authority will build office buildings, warehouses and residential houses for customs officials in Togochale. Damitew said work on the project will commence this year. "We will soon start rendering customs clearance service to Ethiopian importers," he said.
The resident representative of the Djibouti port says it is the best alternative to Ethiopia. "Djibouti port is the closest one of its kind to Ethiopia," Abdourahman claims. Regarding Ethiopia's new move to Berbera port, Abdourahman said that this was too small to handle Ethiopia's foreign trade. "Ethiopia's cargo is the most important business to the Djibouti port. And when some of the cargo is diverted to another port, it obviously affects our income," says Abdourahman.
However, he said, it was not economical for Ethiopia to use Berbera. "In the first place Djibouti port is closer to Addis Ababa than Berbera. Secondly, Berbera is a small port that can't accommodate big vessels. That is why we give transshipment service to Somaliland," Abdourahman said. "The port facility of Djibouti and Berbera are incomparable. They can't compete with us," he added. According to him, the Berbera port can handle some amount of Ethiopia's cargo. However, he said the existing port facility a t the Berbera port cannot satisfy Ethiopia's need.
Ethiopian officials know that Berbera port does not have the required capacity to handle Ethiopia's cargo. But they decided to import some amount of the country's import via Berbera. Accordingly, the state enterprises have begun to use Berbera.
"Ethiopian officials want an alternative port because they don't want to be fully dependent on Djibouti," says an expert in the forwarding business. "If Ethiopia could use other ports like Berbera and Port Sudan it would have a better bargaining power in dealing with Djiboutian officials. That is the intention of Ethiopian authorities," the expert said.
this article first appeared in The Reporter (Addis Ababa) on 14 January 2006 and is used here with permission
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