FTA Directive, Incentives to Relieve Transportation Woes

Government is encouraging Addis Abeba public transport associations to form share companies to improve city transport in Addis Abeba with incentives including duty free import and loan facilities. The directive “for the Provision of License, Control and Vehicles Specification for Vehicles to be bought by Private Investors in Loan and Duty Free” was issued by the Federal Transport Authority (FTA) and has been effective as of March 19, 2015, targeting the city’s Minibus Association members, Midi Bus Association members and Alliance Transport S.C. as primary beneficiaries. “The city’s transport should fit with the city’s growth; big cities use mass transportation and metered taxis,” said Kassahun Hailemariam, the director of the FTA, adding that the named associations and share company were prioritised because of their “experience and their reliability”. Addis Abeba’s transportation sector has various actors and initiatives taking place. There are 7,500 blue and white minibus taxis in operation. There are also 800 operation buses, managed by the state-owned Anbessa City Bus Service Enterprise. The government had also imported 500 Higer buses, out of the planned 1,000; these buses were transferred to private owners through government loans, although some of them have since been foreclosed on by the Commercial Bank of Ethiopia for failing to service their debts. Privately owned Alliance Transport S.C. also operates 25 buses. Added to these there are also 300 buses and 4,000 white minibuses offering services on special permits to alleviate the transportation problem. Recently, Addis Abeba has also introduced 500 large blue buses which are offering free transportation to public servants at mornings and evenings, some of them providing paid public service during the rest of the day. The Light Rail Transport (LRT) service is also expected to begin operations soon with 42 vehicles. The Addis Abeba administration is also awaiting the delivery of 300 buses from Metal & Engineering Corporation (MeTEC), all to be used for public transportation – the contract for these buses, worth 1.1 billion Br, was signed in October 2014. The new directive is intended to gradually remove the blue and white taxis from the streets through competition. The city expects “better and more effective” city transport by removing the blue and white buses from the streets competitively through process, Kassahun says. Ironically, the Addis Abeba administration has forbidden owners of taxis in the city from transferring to other businesses or from selling their vehicles to buyers who could take them out of Addis Abeba, because of the challenge of meeting the city’s transport demands. The commuting public can look forward to the introduction of 500 more mass transport buses. The associations, that are yet to form share companies, and Alliance Transport S.C. have six months to organise themselves in such a way that each share company can import 50 to 100 vehicles, according to the directive with as much as 70pc loan from the government. Currently, there are 15 minibus taxi service provider associations, three midi bus associations and Alliance in business. “These buses and the others operating in the city will have the role of feeding the city’s LRT transit, which will be fully operational in the near future,” said Kassahun. The measures being taken now are small for the growing transport demand in the city says Yabibal Addis, head of the AATB, adding that “This will at least give a breath to the system for five years.” The FTA and the AATB are also jointly working on the establishment of depots for the buses and terminals to board and drop from the 500 buses that will be availed by the private sector.


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