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Andinet Ship Photo Ethiopian Shipping Lines

Djibouti Port tariff increases

Managers in Addis ; Aden A. Doualeh appointed Head of DPFZA

By Groum Abate

Capital

The new tariff that applies to all services at the Port of Djibouti, have been a point of discussion for both the Ethiopian and Djiboutian governments since its announcement in July this year.

Jérome Martins Oliveira CEO of the Port of Djibouti, Djama Ibrahim Darar the Commercial Director, and Gherard Bhota the Director of the Container Terminal, arrived today for a three-day visit in Addis Ababa.

During their visit the group is expected to meet with exporters, transporters, transitors, forwarders and representatives from the Ethiopian Shipping Lines, and Maritime and Transit Services, and confer on the new port tariff among other issues.
The officials, who arrived today Sunday November 30, will stay until Wednesday December 3.
The tariff increment was first scheduled to be effective as of August 15, 2008, but later postponed for an indefinite period of time, following the recommendations made by the committee set up by the Ethiopian government to study the tariff revision proposed by the Port of Djibouti.
The committee set up to assess the port revision includes members from the Ministry of Trade and Industry (MoTI), Ministry of Transport and Communications (MoTC), the Customs Authority, Maritime Transit Enterprise (MTS) and the Ethiopian Shipping Lines (ESL).
According to their assessment the said tariff revision would be applied on three main services, namely an increase of 25 percent in marine charges and a 15 percent spike on both container stevedoring and cargo port dues, as well as a reduction of the period of free storage for cargo from the previous 15 days to 8 days on transit cargo from Ethiopia. Their conclusion was that the new price adjustment would incur over 22 million dollars additional cost per annum on Ethiopia calculated on current import export trade.
Ethiopian foreign trade is the mainstay of the Port and according to Djiboutian port authorities comprises up to 85% of all activity.
President Ismael Omar Guelleh of Djibouti during his official visit to Ethiopia in mid July had met with Prime Minister Meles Zenawi and said to have discussed the port tariff issue among others.
Concerned about the new tariff raise, Minister of Trade and Industry Girma Birru had also traveled to Djibouti on July 9, 2008, and held discussions with President Guelleh, as part of high officials' diplomatic negotiations.
In an exclusive interview with Capital in October, 2008 Jerome Oliveira CEO of Port of Djibouti had said that he expects the new tariff to be implemented by November explaining that the port has been facing huge costs not only in terms of operating costs but also in terms of the new facilities and equipment at Doraleh Container Terminal as well as Djibouti Port.
He further said that the two government officials have been discussing and the Ethiopian side had requested some time before the implementation of the new tariff. He also stressed that the port has not made any increment in some services for over 15 years, noting that the revised tariff when compared to other port facilities around the world is among the lowest.
It is noted that this will be the first comprehensive adjustment of tariff on port operations since Ethiopia and Djibouti signed a port utilization agreement in May 2004.
Abdourahman Elmi Ismael, Resident Representative of the Port of Djibouti in Ethiopia, confirmed that the newly revised tariff will be applied as of tomorrow, December 1. Whether this will affect goods that are already at the Port or not is not clear.
In related news, the first freighter ship is expected to dock at the new Doraleh Port, on December 10. Doraleh container terminal will be officially inaugurated on December 18, at the end of the PAPC - Pan African Ports Cooperation - conference scheduled from December 15 to 18, and hosted by the Port of Djibouti.
In related developments, Mr. Aden Ahmed Doualeh, former General Manager of the Port of Djibouti, before its management was contracted to Dubai Ports, has been appointed as Head of the Djibouti Ports and Free Zones Authority (DPFZA) replacing Abdourahman Boreh. Mr. Doualeh was serving as the representative of the government of Djibouti at the Port.
The Port of Djibouti's expansion works and increased vibrancy also reflect the surging volume of Ethiopian foreign trade. Total traffic for 2007 grew by 41% over 2006 figures (2006 - 3,743,332 MT, 2007 - 5,291,131 MT), and vessel numbers are up 35% to 1411 the port recalls. Inbound traffic, the bulk of which is destined to Ethiopia, stood at 6,271,466 tons in 2007, sharply up by 35% over 2006. This has been attributed to the nearly 400% spike in cement importation and also to the 46% higher volume of iron, both items imported by Ethiopia's booming construction sector.

Meanwhile, outbound traffic in 2007 touched 1,169,000 tons with container traffic rising by 31% to stand at 294,902 TEU.
In regard to infrastructure and capacity enhancement, the most significant undertaking has been the construction of the Doraleh Oil Terminal and its complementary jet and fuel storage facilities. The container terminal at the main port has also benefitted from the installation of modern lifting machinery and powerful gantries, which have sped up loading and the off-loading of cargo. Doraleh Oil Terminal boasts several berths are capable of accommodating multiple, deep-draught oil tankers at the same time.
The Port of Djibouti has been under DP World management concession since May 2000.