After a bumpy road to become established, 26 taxi associations have succeeded in striking up a deal with four automotive companies. A little over 1,000 seven-seater vehicles are expected to swarm the streets of Addis Abeba from the beginning of October 2016.
Close to 150,000 dollars in capital has been allocated for the purpose.
The four companies, three local and one foreign, have won the restrictive bid upon invitation to supply the cars.
Yangfan Motors Plc, Local Subsidary of Chinese Lifan Motors Company is the only local assembler.
The other two exclusive agents of Toyota and Avatovaz are MOENCO and Scandisd trading respectively.
Avtovaz a new player in the filed is the biggest Russian manufacturer of Renault, Nissan, Datsun and Lada brands.
Lada Largus, a product of Avtovaz, is the most common small taxi on the streets of Addis Abeba. This is as a result of the political affiliation with the east communist bloc during the Cold War era.
However in terms of supplying the assocation letter of invitation was sent out to 11 companies, which later sent offers to each association.
The associations evaluated the offers based on three main points – the availability of spare parts, maintenance services and price.
Four of the 11 secured contracts from the associations, including the privately owned Adika Taxi Services Plc.
The local subsidiary of the Chinese, Lifan Motors, Yangfan, agreed to supply 821 Lifan 530 vehicles to 20 associations, while MOENCO will provide 149 Toyota Avanza care to two further associations scansid deals with one association to import 43 Lada Largus.
The Lifan 530 is a four-seater automobile assembled in Ethiopia, while both the Toyota Avanza and Lada Largus are seven-seater models.
Adika, the only company that operates a meter taxi service in the city, will revamp its capacity, adding 150 more Toyota Avanza models to its service.
It fully launched its service in 2015, after the failure of Sheger Meter Taxi SC. When the company first became established two years ago, it imported 25 cars worth nine million Birr from Saw – a Chinese car maker, selected through a bid.
The tariff for the service might vary, however, with the existing price set at 24Br basic and then 24Br more for each kilometre travelled.
“The Authority will sit with all the association representatives and collectively fix a tariff per kilometre,” Eskinder Yimer, head of the Ethics & Complaints Office at the Federal Transport Authority (FTA), told Fortune.
Upon closing the deal, preparations began to be made, including opening a letter of credit, and securing an authorisation letter from the Ministry of Trade and the Authority for duty free importation.
The companies, Yangfan and Scandsid, managed to facilitate a loan provision to the associations as a duty. Twenty-one associations, therefore, will enjoy a 70pc loan, from Birhan Bank. MOENCO has separately secured a green light from Lion Bank.
The associations, in all cases, will have to finalise repayments within a maximum of three years.
The cost of the vehicles ranges from around 10,000 dollar to 12,000 dollars, while the offer made by MOENCO was almost double that of the others.
“Cars supplied by MOENCO are seven seaters, while the Lifan 530 are four seaters,” said a coordinator from one of the associations that decided to pay as much for the Avanza, Toyota brand.
An FTA invitation for the registration of taxi owners as share companies was forwarded after the directive earlier in March 2015.
The response from taxi owners in the city was sluggish, despite the duty free privilege and loan facilitation.
“The initial 110,000 Br capital prerequisite was a bit tough for many,” a taxi owner recalls.
Even out of the 54 who initially established share companies, only half made it to the finish line and reached this point.
Currently, residents of Addis Abeba are served with 5,839 Code-1 and 4,896 Code-3 privately owned taxis. These taxis are obliged to organise under associations and strictly abide by FTA Zoning Routes. Unlike the upcoming meter taxis, the existing taxis are expected to display their route and stick to them.
In 2015, Ethiopia’s vehicle imports amounted to close to 845.8 million dollars – 60pc higher compared to the previous year. The sector’s growth has shown a 900pc increment over the past decade.
Leave a Reply