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The Management of Commercial Road Transport in Ethiopia

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The Management of Commercial Road Transport in Ethiopia The Management of Commercial Road Transport in Ethiopia May 2009 Produced and distributed by the Addis Ababa Chamber of Commerce and Sectoral Associations with �inancial support from the Swedish Agency for International Development Cooperation, Sida Sida © Private Sector Development Hub/Addis Ababa Chamber of Commerce and Sectoral Associations, 2009 P. O. Box 2458, Mexico Square, Addis Ababa, Ethiopia Tel: +251(0) 115 504570/ 542405, Fax: +251 (0) 115 542404, Email: [email protected] All Rights Reserved. No part of the publication may be produced or transmitted in any form or by any means without the prior permission of the copyright holder. The only exception is for a reviewer, who may quote short excerpts in a review. Disclaimer:- The views expressed in the study do not necessarily reflect the views of PSDHub or Addis Ababa Chamber of Commerce and Sectoral Associations or Sida. They are solely the responsibilities of the authors. Acknowledgements he study on The Management of Commercial Road Transport in Ethio- pia was initiated by the Private Sector Development Hub in response to the problems encountered by transport companies, associations, and individual operators with respect to operating environment, costs and margins; and by transport service users in relation to effi ciency, price and reli- ability with its impact on competitiveness. W.T Consult Pvt. Ltd. Co. was contracted to undertake the study and produced the draft report. The report was further reviewed, enriched and fi nalized by David Shelly of BKP Development Research and Consulting GMBH. Throughout the report, “Consultant” refers to W.T Consult, while “Review Team” refers to BKP and David Shelly who have fi nalized the report. Contents Acknowledgements Acronyms Chapter One Introduction 9 Chapter Two Transport Sector and Macroeconomic Background 13 Macroeconomic Scenarios and Development 13 Highways and Roads 16 Road Traffi c and Composition 18 Road Safety 22 Vehicle Fleet and Travel Characteristics 25 Railway Mode 33 Shipping: Need for Choice in Multimodal Transport 34 Air Cargo Mode 37 Development of the Multimodal Transport Industry in Ethiopia 38 Ports of Entry 41 Dry Ports 41 Chapter Three Road Freight Transport 45 Categories of Operation and Capacity 46 International Road Freight Operations (Import and Export Traffi cs) 47 Freight Transport Demand and International Freight Transport Service Delivery 49 Interurban Domestic Road Freight Operations 56 Urban Freight Operations 57 Road Transport Maintenance Planning and Facilities 61 Road Freight Terminals 61 Warehousing 62 Freight Transport Vehicle Productivity and Costs 62 Road User Costs 68 Freight Tariffs 70 Freight Forwarding 73 Vehicle Overloading 74 The Potential for Road-Rail Inter-Modal Transport 76 Current Status of Commercialization 77 Freight Transport Service Forecast (2006-2015) 77 Chapter Four Road Passenger Transport 79 Passenger Transport Fleet Utilisation 81 Urban Transport 81 Level of Service: Intercity and Urban Bus Operations 88 Taxi Fleet and Level of Service: Operations in Addis Ababa 91 Travel Demand/ Patronage 93 Passenger Transport Vehicle Productivity and Costs 94 Competition and Effi ciency 95 Entrance to Market 96 Public Transport Maintenance Facilities 97 Road Passenger Terminals 97 Anbassa Depot Sites 98 Fares and Tariffs 98 Status of Commercialization 102 Passenger Transport Service Forecast 103 Chapter Five Institutional Arrangements in Road Transport 107 Political Context: Institutional Structure Including Allocation of Powers between Jurisdictions 107 Other Relevant Government Institutions 108 Road Freight Transport Industry Structure 110 Road Freight Transport Industry Organizations 112 Road Passenger Transport Industry Structure 115 Road Passenger Transport Industry Organizations 118 Road Safety 119 Access to the Profession 119 Human Resource Development and Management Capacity 120 Some Institutional Issues 121 Chapter Six Legal Framework and Road Transport Regulations 123 Legal Framework 123 Road Transport Regulations 124 Operation and Regulation of Road Passenger Services 126 Operation and Regulation of Road Freight Services 127 Findings of Road Transport Regulations Study 127 Findings of National Transport Master Plan Study 128 Findings of Other Studies 130 Key Legislative Issues 132 Key Regulatory Issues 133 Chapter Seven Banking and Transport Industry Insurance 135 Financial Performance and Sustainability 135 Motor Vehicle Insurance 137 Key Business, Finance and Management Issues 139 Key Banking and Insurance Issues 140 Chapter Eight Analyses of Some of the Principal Road Transport Issues 141 Overview of Road Passenger Transport 141 Overview of Road Freight Transport 142 Some Important Challenges in Road Transport 143 Some Measures to Improve Road Safety in the Road Transport Industry 145 Some Measures to Improve Urban Transport Organisation in Addis Ababa 147 Some Measures to Enhance International Road Freight Business 147 Some Measures to Enhance Dry Port Operations 148 Some Measures to Combat Vehicle Overloading 150 Chapter Nine National Transport Masterplan Study Framework and Strategic Directions 151 Specifi c Action Plan Components: Road Freight (Excluding Import/ Export Corridor Traffi c) 152 Possible Free Trade Zone 157 Specifi c Action Plan Components: Road Freight Import/ Export Corridor Traffi c 158 Specifi c Road Transport Action Plan Components: Intercity and Urban Transport 161 Chapter Ten Synthesis of Study Recommendations 163 Vision Statement 163 Policy Statements 163 Adoption of Specifi c Actions for Road Transport Sub-sector 165 Development of Wider Action Plans by Implementing Institution 166 Possible Follow-up Process 171 Annexes Annex 1 Minibus Taxi Service Supply Characteristics 175 Annex 2 Competition and Effi ciency – Road Freight 181 Annex 3 Bus Fares and Tariffs 183 Annex 4 Road Freight Industry Structure 188 Annex 5 Public Transport Industry Structure 194 Annex 6 Access to Credit/Loans 199 Annex 7 Free Trade Zone 202 Annex 8 A WTO Accession 204 Annex 8 B Developments in the Freight Industry - World Experiencs 205 Annex 9 National Transport Master Plan 207 Annex 10 Specifi c National Transport: Master Plan Priorities 208 Annex 11 Road Transport: Action Plans for Principal Actors with Timeline 210 List of Tables Table 2.1 Annual GDP Growth Estimates (2006/07 – 2026/27) 16 Table 2.2 Regional Development Scenarios 16 Table 2.3 Summary of Daily Traffi c on ERA Network (1994–2004) 19 Table 2.4 Growth in Daily Traffi c (in Vehicle-Km) on ERA Network, 1994-2004 19 Table 2.5 Estimated Traffi c Flows on Selected Routes in 2004 19 Table 2.6 Traffi c Growth (2003-04) 20 Table 2.7 Road Network Compositions, Km (2008) 21 Table 2.8 The Magnitude of Road Traffi c Accidents (RTA’s) in Ethiopia 23 Table 2.9 Traffi c Accident Deaths by Road User Type 24 Table 2.10 Accident Involvement of Vehicles in the Year 2004/5 24 Table 2.11 Growth of Ethiopian Road Vehicle Fleet (2000/01 - 2004/05) 26 Table 2.12 Annually Inspected and Registered Vehicles by Type of Services 26 Table 2.13 Road Passenger and Freight Fleet Data-Total Vehicles by Capacity (Year 2007) 27 Table 2.14 Imported Freight Transport Vehicles 28 Table 2.15 Annual Growth of Minibus Taxi Fleet by Seat Capacity (1998/99-2004/05) 29 Table 2.16 Growth of Passenger Fleet by Seat Capacity 29 Table 2.17 Annual Growth of Public Road Passenger Vehicles by Seat Capacity (2005 – 2008) 30 Table 2.18 Occupancy Rates for Passenger Vehicles (2006) 30 Table 2.19 Loading of Goods Vehicles in MT (2006) 31 Table 2.20 Truck Commodities Carried and Average Load Per Truck in Tonnage 31 Table 2.21 Average Truck Journey Times from Survey 32 Table 2.22 Distribution of Vehicles between Regions 33 Table 2.23 Estimate of Transit and Transport Costs of Export 37 Table 2.24 Estimate of Transit and Transport Costs of Import 37 Table 3.1 Growth in Cargo Traffi c (1999-2005) 50 Table 3.2 Growth of Annual Liquid Bulk Cargo Traffi c (1999-2005) 55 Table 3.3 Good Vehicle Access and Loading Objectives in Urban Areas 60 Table 3.4 Cargo Delay Values (2004/05) 65 Table 3.5 Fuel Retail Price Structure, Birr /Cents Per Litre (August 2006) 65 Table 3.6 Countrywide Retail Pump Prices in Birr Per litre (December 2006) 66 Table 3.7 Indicative Truck Financial Operating Costs Per Tonne Km (Birr) 67 Table 3.8 Comet Truck Break-even Operating Costs in Birr (2006) 67 Table 3.9 Import Duties and Excise Taxes on Vehicles 69 Table 3.10 Fuel Retail Price Structure in Birr Per Litre (August 2006) 69 Table 3.11 Freight Transport Tariffs, 2005/06 (Ethiopian fi scal year 1997) 71 Table 3.12 Loading of Goods Vehicles (2006) 74 Table 3.13 The National Transport Master Plan Study Truck Forecasts 78 Table 3.14 Review Study Truck Forecasts 78 Table 4.1 Services of Anbassa City Bus Entrprise (1991-2001) 82 Table 4.2 Annual Growth of Road Transport Passenger Volumes and Pax-kms 2005-2008 93 Table 4.3 Indicative Bus Financial Operating Costs Per Passenger Km (Birr) 94 Table 4.4 Occupancy Rates for Passenger Vehicles (2006) 95 Table 4.5 Long Distance Bus Passenger Tariffs (2005/06) - Ethiopian fi scal year 1997 99 Table 4.6 The National Transport Master Plan Study Passenger Vehicular Fleet Forecasts 103 Table 4.7 Review Study: Passenger Vehicle Fleet Forecasts 104 Table 4.8 Annual Growth of Road Transport Passenger Traffi c & Pax-Kms (2005-2008) 104 Table 4.9 Review Study Passenger Traffi c Forecasts 105 Table 5.1 Commercial Trucks Licensed by Transport Authority (2006) 111 Table 5.2 Comet Haulage Performance, by Year 115 Table 5.3 Intercity Bus Seats (2006) 116 Table 5.4 Organizations
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