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Officials at the Ethiopian Revenues & Customs Authority (ERCA) have made a turnaround on their earlier plan to compel IT companies to raise 20 million Br in capital if they are to be registered to supply devises for electronic cargo tracking. Troubled by an increasing practice of pilfering goods on the Addis Abeba to Djibouti transport corridor, the ERCA hired an US-based company for 2.5 million dollars to establish an electronic monitoring system. HI-G-TEK developed the system using Radio Frequency Identification (RFID), which will help customs officials get real-time information on the activities of trucks to and from Djibouti port. There are around 10,000 trucks with varying carrying capacities, of which half are fuel transporting vehicles. A trucking company has to pay around 20,000 Br, including installation fees, to get the devices in each truck under its fleet.

The US company has installed the system in the six selected stations along the corridor and trained around 30 officers of the Authority. However, the system is yet to be functional, for every truck on the highway should be fitted with electronic tracking devices to be supplied by IT vendors certified by the Authority. In order to be certified, a company is required to have 20 million Br in capital, produce a performance bond worth two million Birr, and have a five-year contract with major IT suppliers, according to the directive issued by the ERCA to regulate the new system. No vendor has been certified, yet, for many see the requirement to raise such lofty capital as an impediment. So far, GCS Tracking Plc, Global Tracking Plc, Ramsea Industrial Solution Plc, and FC Tracking are the companies that have applied to get into the business. The companies are to supply the seals, locks, and compact readers as well as GPRS modems to identify locations of the cargoes.

Subsequent to complaints from the IT industry, legal experts at the ERCA are busying themselves, studying the experiences of other countries, which they hope will be used for possible amendments. However, these experts are divided over the proposition to reduce by half the current capital requirement, while others argue that a performance bond is enough, according to sources. Surprised to hear about the amendment, Zelalem Dagna, managing director of Global Tracking Plc, sees the change as an appropriate move by the ERCA. However, he still claims that the requirement for a two million Birr performance bond should not be removed but be determined on a project basis.

Officials at the ERCA, which is enforcing the current requirements, however, declined to comment. The Authority is also negotiating with the Ministry of Transport (MoT), which is implementing a fleet management system that will also monitor and indicate the whereabouts of trucks, negotiating with the Authority to interface the two systems. Most of the devices used for both systems are the same, thus can run with a single subscriber identification module (SIM) card, transferring all data for the respective institution, according to an electrical engineer at the ERCA. He is concerned that failure to interface the systems would allow transport companies to jack up prices, which he fears would trickle down to the end user.

By all accounts it seems like the initiative was launched on impulse and a whim without prior consultation with stakeholders. Per usual it’s the consultants who have scored out of this. Source: Addis Fortune