Modjo Port Expansion Sees Delay

Machinery breakdowns blamed for delay

A project worth over 1.4 billion Br for the expansion of dry port at Modjo has been stalled for over a year due to the contractor’s difficulty in finding spare parts for  its paving block machine at the cost of 2 million Br.

The Ethiopian Construction Works Corporation, blames the delay on procurement process.

“The spare parts aren’t available in Ethiopia,” said a representative of the Corporation, who wished to remain anonymous. “The machine itself was purchased from abroad.” Now after one year of fruitless efforts, a new plan has been adopted to directly purchase the necessary machinery.

“We issued a bid for the spare parts to fix the existing machine, but we haven’t had any offers for close to nine months now,” said the employee. “We received special permission from the government procurement agency to buy the parts ourselves.”

The project was launched in 2012, in an effort to expand the most congested dry port in Ethiopia. Ethiopian Shipping and Logistics Service Enterprise (ESLSE), the owner, had planned for the project to be completed last year.

The expansion would have boosted the carrying capacity of the port to 15,000 containers. Close to 142,000 containers are cleared across all seven dry ports in Ethiopia

Paving block machines cost an estimated 11 million Br each. However, the well documented difficulty of getting foreign exchange has proved problematic in the purchases of the new machine and the spare parts.

Due to the increased number of multi modal containers arriving in Ethiopia, the dry port was forced to begin operations without construction being completed. This lead to congestion and improper storage of containers and dust hazards as well as damage to the construction site. Currently, the port is storing more than 14, 500 containers.

Since its establishment in 2009, the Modjo Dry Port and Terminal has facilitated the entry of about 70pc of Ethiopia’s import items. It is located 73 km east of Addis Abeba and 553 km from Djibouti.

ESLSE estimates that the remainder of the project will cost around 26 million dollars.

“It’s going to cost a lot to repair the existing damage once the expansion is complete,” said a representative of ESLSE, who wished to remain anonymous. “As it is, the damage is creating health and safety hazards, as well as security issues arising from improper storage.”

Due to existing time and space constraints, containers are only allowed to stay in dry ports for two months. Earlier this year, over 220 containers were confiscated. The containers are allowed to stay in the dry port for six months, before having their contents examined and auctioned by ESLSE. Other issues make it difficult to speed up the process of clearing containers through the dry port.

At the country’s dry docks, document compliance procedures take about 126 hours and costs around 175 dollars, while border compliance procedures take about 57 hours and costs around 145 dollars, according to World Bank doing business. These costs are passed to the importers.

The Corporation was formed by a merger between the Ethiopian Road Construction Corporation and the Ethiopian Water Works Enterprise in 2015, and carries out the construction of railways, runways and ports.

Last year, the Corporation took its first overseas project which included constructing an irrigation infrastructure development project in Rwanda, worth 3.6 billion Rwandan francs.

There are seven dry ports in Ethiopia: Gelan, Modjo, Comet, Semera, Kombolcha, Meqelle and Dire Dawa.


Published on Nov 24,2016 [ Vol 17 ,No 864]



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