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The state-owned Walia Intercity Bus Service
Enterprise has been selected to carry out after
sales maintenance of the 500 mid-sized buses
procured from China. The government, through
Anbessa City Buses Enterprise, has procured the
25-seat capacity buses at a cost of 13.2 million
dollars from HIGER Bus Company Ltd.
“We have been selected satisfying representatives of
the supplier with our number of staffs and
maintenance facility,” Sisay Yimer, general manager
of Walia Bus, told Fortune. “It is also an
opportunity for us to grow.”
The government decided to import 2,000 medium sized
buses on credit in 2006 in a bid to alleviate the
shortages of public transport in the city. The
responsibility was subsequently given to the
Ministry of Transport and Communications (MoTC),
which instructed the Federal Transport Authority (FTA)
to a find credit supplier.
Accordingly, Anbessa Buses signed an agreement with
the HIGER in June 2006 on behalf of the Authority
for the procurement of the 500 buses. Only 90 of the
buses have arrived in Ethiopia thus far, but two are
already damaged.
The agreement also obliges the company to provide
maintenance services.
Anbessa Buses decided to sub-contract it to a local
company instead of setting up a new maintenance
facility from scratch.
According to the accord, HIGER is also required to
supply eight million dollars worth of spare part
with the buses.
“As we currently do not want them to dump all the
spare parts in our warehouses, we have opened a
letter of credit (LC) with 106,000 dollars to bring
the spare parts at our convenience,” Sisay told
Fortune.
Walia Bus opened the LC at the Commercial Bank of
Ethiopia (CBE) three weeks ago.
There are however concerns among the participants of
the procurement.
“I do not believe it is right to bring in the spare
parts in an extended time as the agreement is to
them all at once,” an official who participated in
the procurement told Fortune. “This procedure
is prone to corruption.”
Walia Bus will also offer the spare parts for sale
in addition to rendering maintenance services in its
workshop off Smuts Street.
Walia Bus was born in 1995 detaching itself from
Anbessa Buses established during the Derg Regime.
Going operational with a capital of 16.9 million Br,
Walia has a five per cent market share with its 31
buses.
However, the company is operating at a loss. Though
PPESA repeatedly put the company on the auction
block, no buyer was interested to acquire it. Thus,
of its 900 staffs, the government has recently laid
off 500.
But Sisay has hopes that some of the laid off
mechanics would get re-employed when Walia launches
maintenance services.
“We need 43 mechanics,” disclosed Sisay. “Former
employees will be given priority as they have
experience.”
The company’s workshop repairs only Mercedes
vehicles. For the maintenance of the new buses,
HIGER will also send six mechanics from China.
“Only three mechanics were supposed to come for the
agreement,” said Sisay. “HIGER doubled the mechanics
considering the potential market that exists in
Ethiopia.”
If the remaining 1,500 buses are procured by the
government, Walia has planned to open spare part
outlets in every district, according to the general
manager.
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