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Month: October 2019
FACING THE PEOPLE
Tagesse Chaffo, speaker of parliament, started the second regular session of the fifth year of the federal legislative house on the morning of October 22, 2019, by congratulating Prime Minister Abiy Ahmed (PhD) for his recent win of the 100th Nobel Peace Prize.
President Sahle-work Zewde had already given a speech setting out the government’s priorities for the year to the joint session with the House of Federations, on October 7, 2019, at the opening of parliament. The agenda for the day was to discuss the questions raised by parliamentarians to that speech and to pass a motion endorsing it as the government’s programme for the year. The Prime Minister gave detailed answers in the session that lasted for one and a half hours to questions that were raised from 16 of the 375 members that were present.
The question that elicited a long and detailed response from the Prime Minister concerned the coming election. Stating his government’s stand on the issue, Abiy reaffirmed his commitment to have the election as scheduled. He tried to assuage the lawmakers’ concerns that the peace and security situation may not be stable enough to hold the election.
“It’ll never be possible to have a problem-free election in Ethiopia,” he said. “Democracy is a culture that can only be improved by exercising it, not by running away from it.”
He also stressed that he is going full speed ahead with his ambitious project of turning the ruling coalition, the EPRDF, into a single party despite stern opposition. The motion passed with 19 abstentions and, for the first time since 2015, one objection.
Capital Punishment: an Overkill, Irreversible
The Council of Ministers has recently endorsed a bill and tabled it for parliament this month, which aims at deterring human traffickers and those involved in the illegal migration scheme.
One of the articles in the bill proposes making the extreme forms of this act punishable by death.
It has been a while since any law whose transgression has consequences in capital punishment has surfaced in parliament. This, no doubt, catches attention.
Granted, the attempt to address the problem of illegal migration and human trafficking is well-intentioned. But introducing the death penalty may be an overkill, and should at the very least be discussed widely.
Migration has become one of the biggest headaches of the last decade for governments everywhere. It used to be just an after effect of war and conflict. Not anymore. It is now a non-stop global problem.
Increasing income inequality in the global south, in addition to the traditional migration drivers of war and conflict, have been tributaries of the non-stop flow of rivers of migrants to the relatively calmer waters of the north: the rich world. As long as the desperation that drives people to take the enormous risks of migration is not addressed, there will always be those that will take advantage of this desperation to make money.
The recruiting agents and the human traffickers are not going to quit unless the underlying problems are solved and dry up their business.
However, states that have exhausted all the tricks in their books without much success are turning to unconventional means. They seem to prefer increasingly harsher measures in their effort to turn the tide. This runs the gamut from building ridiculously long walls along borders to suggestions of digging human-made ditches in order to stop the inflow to shoot-to-kill orders in countries battling the outflow.
Ethiopia seems to be joining this league of nations, though only by employing an existing law.
Not just in this particular bill but in general, the issue of capital punishment seems to be a neglected topic in the Ethiopian civil discourse. There has never been much dialogue and public debate on the issue. Partly, it could be because executions are not frequent. But it remains in the books, and as long as it does, it should be up for the test of public debate.
It is about time Ethiopians start a public dialogue on the topic, especially now that not only are the authorities letting what is in the books stay there, but they are even adding to it.
Those who advocate for the death penalty start their argument by highlighting the awfulness of the crimes committed and the need to deter others from doing the same. What the draft law, for instance, makes punishable by death is a severe crime often committed on children, the weak and involves drug trafficking as well as the smuggling of weapons.
There is a great deal of extortion going on, at times resulting in the death of victims. It is a truly horrendous crime and not one lightly applied.
Such gruesome acts trigger anger among members of the public, particularly when it is committed on the defenceless and children. Understandably, the reaction in society crosses beyond the call to see justice done toward the urge for vengeance.
The question is whether a civilised justice system – that is not barbaric in its application – should succumb to this human emotion of revenge? Isn’t the whole point of the law reining in such sentiments, having a dispassionate search for the truth and meting out a proportional punishment to serve justice?
Then there is the deterrence argument.
The belief that the fear of capital punishment stops individuals from committing crimes is nothing but intuitive in its reasoning. There is little empirical evidence, however, to prove that capital punishment is a more effective deterrent than life imprisonment. Amnesty International reports that states without the death penalty continue to have significantly lower murder rates than those that retain capital punishment.
The lack of overwhelming evidence of the deterrence effect has to be weighed against the historically documented cases of the limitations of the death penalty, including unacceptably high wrongful convictions. For example, more than 160 prisoners sent to death row in the United States have later been exonerated or released from death row since 1973 on the grounds of innocence. There have been many accused defendants executed despite serious doubts about their guilt, according to Amnesty International. One gets exonerated for every 10 executed, says the American Civil Liberties Union.
The universal recognition of the limitations of the effectiveness of the death penalty is behind the reason why an increasing number of countries have outlawed it entirely. There were only 16 countries in the world that had done so 40 years ago. It reached 106 countries last year.
Apart from the general arguments here, since the bill under the legislative process is a concrete case that will be affecting real people, it is essential to consider Ethiopia`s criminal justice system that will be tasked to enforce it.
Most of the sources of the migration in Ethiopia are rural areas. The people smugglers and their recruiting agents are not operating in urban centres. The arrests and the initial contact with the law enforcement system will be happening in these areas. These are the parts of the country where the capacity of the arresting officers to follow the proper safeguards to protect the rights of the accused is suspect. The judicial system is so overburdened, understaffed and the jurisprudence capacity questionable that the wrongful conviction of innocent people could be high. There is a legitimate fear that innocent people will fall victim.
The death penalty is an absolute punishment that will be carried out by an imperfect and often incompetent – not to say corrupt – criminal justice system.
Should society trust it with this heavy responsibility?
“The risk of executing innocent defendants can be entirely eliminated by treating any penalty more severe than life imprisonment without the possibility of parole as constitutionally excessive,” John Paul Stevens, a former US Supreme Court Justice, once said.
Motion to Parliament Passes with One Objection
Last Tuesday, October 22, 2019, Prime Minister Abiy Ahmed (PhD) was in the House of People’s Representatives for the fifth-year, second regular meeting to pass a motion on an agenda presented to both Houses by President Sahle-Work Zewde on October 7, 2019, outlining the government’s direction for the fiscal year.
Out of the 547 representatives, 375 attended the meeting and 16 members threw questions at the Prime Minister. Sahle-Work had highlighted the current situation of the country and listed the government’s plans to stabilise the political, social and economic challenges.
Sahle-Work identified preserving and broadening political and economic activities to be more inclusive, redressing mistakes committed in the past and guarding the interests and benefits of the coming generation as the core objectives of the government.
In addition, maintaining the unity of the country and ensuring the dignity and prosperity of the Ethiopian people were the overarching goals mentioned by the President.
Based on her speech, representatives sent their questions in writing on October 11, 2019, and requested an explanation from the Prime Minister.
The majority of the questions focused on internal regional tensions, illegal gun trafficking, the 2020 election, the EPRDF coalition, displaced citizens and the Grand Ethiopian Renaissance Dam (GERD).
The Prime Minister gave an assurance that the government will make an all-out effort to hold a fair and free election, though he intimated that it is not easy to conduct an error-free one. Some individuals are playing out a drama and working toward disrupting the peace between neighboring regions, said the Prime Minister at the second regular meeting.
He also said the government is working on projects like a bread factory, which is estimated to supply 10 million loaves of bread a day with the financial support of the King of the United Arab Emirates.
The delay of the construction of GERD created the current tension between Ethiopia and Egypt. If it was completed on time, it would not have been an issue, said Abiy.
Concerning the EPRDF coalition, the Prime Minister explained that at the last general assembly of the Front in Awassa, members agreed to complete the coalition process before their next meeting if all goes according to plan.
Abiy insisted that there were issues on the timeline but discussions are being held on how to achieve the coalition.
The Prime Minister also asserted that there is a difference between government and party, and they are not expected to agree on every issue.
Abeba Yoseph, a member of the parliament, raised a question on the role of the media in the coming election.
“Media should never be an instrument for hate speech and pushing political agendas,” said Abeba to Fortune.
It is important to work under the Broadcasting Service Proclamation to the betterment of the country, she added .
For the first time since 2015, a motion was met with an objection. There was one objection on the motion, while 19 abstain from supporting it.
It is not usual to see an objection on a supporting motion said Girma Seifu, a former parliamentarian and politician. “It would have been good to know why these members abstained and made an objection,” said Girma.
The politician also expected the issue of road blocking to be discussed in detail by the Prime Minister, but it was not mentioned as much as it should have been. “We might be able to see some differences of ideas in this year’s parliamentary session if EPRDF does in fact become a single party,” added Girma.
Awash Bank Unveils Plan to Build 12b Br HQs
Awash Bank, the first private bank in Ethiopia, is planning to build a 50-storey skyscraper, which will spread over a footprint of 8,700Sqm, as its new headquarters with an estimated cost of 12 billion Br.
The new headquarters will be located behind Ethiopian Electric Power Corporation’s new main office, which is under construction in Mexico, Kirkos District.
“Currently, we are in negotiations with Addis Abeba City Administration Land Development & Management Bureau, and we are waiting for a letter of confirmation to acquire the land,” said Teshaye Shifraw, CEO of Awash Bank, which grossed a profit of 3.3 billion Br in the last fiscal year.
The bank plans to spend close to 173 million Br to gain the land, he added.
An official from the Land Development & Management Bureau confirmed they have processed the bank’s land inquiry proposal, and the cabinet has come to a decision.
The official also added that in the next few days they are going to finalise the procedure by signing an agreement.
“The construction of the building depends on the result of the soil test that will be conducted on the spot,” said Yohannes Mergu, chief information officer of Awash Bank.
The new headquarters will solve Awash’s current issue of its offices working at maximum capacity by housing most employees under one roof.
It is expected to also feature amenities including walking trails that run through the heart of the facility, a massive park, a fitness center, a clinic, a restaurant, meeting halls, ample parking space and training centers.
The project is expected to be completed in three to four years and the bid for consultation will be floated within the next four months.
The existing headquarters will remain an asset of the bank.
At the end of last week, Awash Bank and Awash Insurance Company S.C. celebrated the achievements of major milestones at their 25th anniversary ceremony held at their headquarters.
The ceremony was followed by inaugurating a grand light box fixed at the main gate of the headquarters.
Throughout October and November there will be recurring events to mark the occasion, and the grand ceremony of the anniversary is scheduled to take place on November 23, 2019, at Sheraton Addis, said Tsehaye.
He also spoke about the challenges and accomplishments in the last quarter century. “Today, I hope as we all re-live the path the companies have traveled, we will embrace the past and move forward to the future,” Tsehaye said.
Awash Bank was established in 1994 with a paid-up capital of 24.2 million Br. It began its operations in 1995 by opening its first branch on Bole Road (Africa Avenue).
Since then, the Bank has built a network of 412 branches, employing more than 6,100 employees serving more than two million customers across the country.
Through its 25 years, the Bank’s paid-up capital rose to 4.4 billion Br with a total of 4,369 shareholders and a gross profit of more than 11 billion Br to date.
“It is obvious that the construction of these buildings will help to attract the workforce and house much of its employees in one place,” said banking expert Habib Mohammed.
He suggested that Ethiopian banks are engaging in a rivalry to expand their corporate headquarters. This might backfire if these banks lose their balance on improving their core business service, Habib said.
The balance sheet of these companies is what explains if these banks are investing in real property and providing core service, he added.
Water Crisis Triggers Rationing Schedule in the Capital
Hanna Desta, in her mid-30s, lives at Semen Mazegaja, the capital. Born and raised in Addis, she has three children. For Hanna, water shortages are a common thing she experiences all the time.
Hanna, a housewife, gets water once a week and like many in the capital, she faces severe water shortages. She and her family of four use water she stores in barrels for the whole week.
The family uses stored water for cooking and cleaning, but she buys bottled water for drinking.
“We get water once a week on Wednesdays,” said Hanna. “If we run out of stored water before the water comes again, we go to relatives who live in other parts of the city to get water.”
“If the water doesn’t come during the daytime, we are forced to wake up and check in the middle of the night,” she said. “Once the water comes, it will stay for half a day.”
It is not only Semen Mazegaja that faces the shortage of water, but many areas in the capital are facing the same problem.
Ehete Abebe, a housewife in her mid-40s who lives at Gofa Mebrat Haile is another resident who is suffering from a shortage of water.
A mother of five children, she does not know the exact time when water comes, and she always has to check the pump to see if there is water even at midnight.
Ehete, who pays an average of 40 Br a month for the water bill, stores water in five 20ltr jerry cans when it comes and uses it for washing clothes and cooking for a week.
“Even though I don’t know the exact date, we get water one day in a week,” Ehete said.
Previously she used to buy 20ltr of water for 15 to 20 Br from water vendors, but because she suspects the cleanness of the water and the rumors she hears about cholera, Ehete stopped buying water from vendors.
“For drinking, I used to buy bottled water,” she adds.
The water shortage is not only affecting the residents but also those in business.
Genet Teshome, in her late 20s, has worked in a barbershop for the last year and a half.
Genet and her five colleagues work at Afro Barbershop, which is located near the National Theater. On average the shop serves 25 customers a day.
Most of her customers wash their hair after they get a haircut. If there is no water, she survives with stored water. When the water comes, she stores it in a large barrel.
Water supply interruption is a common event at the barbershop.
“Water is out for four days of the week,” Genet said. “I buy four 20lt jerry cans of water twice a week, each costing me 20 Br,” she adds.
Established in 1971, the Addis Abeba Water & Sewerage Authority has 560,000 customers in this city of four million residents, according to the Central Statistical Agency. The capital is growing at a rate of 3.8pc annually.
For the capital city, which hosts 30pc of the country’s urban population, the Authority supplies 580,000 cubic metres of water a day, while the total demand reaches 1.1 million cubic metres.
“The continuous increase of the population of the city and large institutions that have high water consumption are the major factors for the shortage of water, and we are working to tackle the problem,” said Serkalm Getachew, the Authority’s communications affairs team leader.
The shortage of forex is also a reason for not completing the ongoing water projects, another factor that complicates the lack of adequate water supply, according to her.
Addis Abeba, a 133-year-old city, built its first water plant at the foothills of Entoto in 1938, followed by Gefersa Dam six years later, which still covers most of the city’s water supply.
Located northwest of the city, Gefersa Dam, which was completed in 1940, underwent thorough renovation in 2008 and increased its water holding capacity to 9.5 million cubic metres and provides 30,000 cubic metres a day.
“Water rationing is not a new thing. If there is a shortage of water, there will be rationing,” said Serkalm. “But to address the shortage of water, we revised the schedule.”
The Authority revised the water rationing schedule in mid-September, and it will last up to six months until the new water projects start providing water.
According to the newly revised schedule, depending on water production and distribution, the supply will be increased or decreased.
Based on the energy it takes to pump the water and consumption rates, out of the total 116 weredasin the capital city, 20 of them get water once a week, while 12 weredasget it seven days a week. The rest get water between two to five days a week.
Throughout the city, which has high water scarcity, the Authority has installed seven barrels that can hold 25,000lt to 50,000lt of water each to address the issue.
The Authority is building water projects in the city to expand the water infrastructure. Currently, the city is getting its water from three dams and around 184 water wells.
A two billion Birr project, the North-South Ayata Fenta Water Well is set to be completed this year with a capacity of producing 68,000 cubic metres a day.
The water project has 21 deep wells and is expected to benefit 650,000 people, while phase two construction of the Legedadi Water Well Supply Project will generate 86,000 cubic litres of water a day. There is also the Gerbi Water Project, which will generate 73,000 cubic litres a day.
Legedadi Dam & Treatment Plant, established in 1970, has the capacity of holding 47 million cubic metres of water and underwent expansion work in 1985 and 2015. Legedadi Dam & Treatment Plant is located on the Aqaqi River east of Addis Abeba and has a capacity of producing 174,000 cubic metres of water a day.
Apart from this, last year the Authority began drilling 12 wells in the city, 10 of which are completed. The wells will have the capacity to provide 6,480 cubic metres of water a day and are expected to benefit 60,000 residents.
The Dire dam is an earth-fill dam which was completed in 1995 and has a capacity of holding over 19 million cubic meters of water.
In the city, over 100 deep and shallow wells have been dug since 1995 and are operational. Including these wells, 413,000 cubic metres, which amounts to 67.9pc of the city’s total daily water production, is obtained from groundwater sources.
The water coverage at a national level was 71pc in the last fiscal year.
In the second edition of the Growth & Transformation Plan (GTP II), the government plans to increase access to water in urban and rural areas to 75pc and 85pc, respectively.
Access is defined as being able to find 25lt of water each day within a one-kilometre distance in rural areas and at least 40lt of water within a 250m distance in urban areas.
Jemal Mohammed, CEO of Blue Matrix Consultancy, has worked in water supply, sanitation and environmental engineering for more than three decades. He believes that even if the ongoing project is completed, it will not bring a significant change. The Authority should make a collaborated effort to solve the scarcity of water, he said.
The Authority should build a strategic water supply project that will serve for the coming 40 years. Unless that happens, solving the water problem is not even imaginable, said Jemal.
Jemal also said that the geographic topography of the city cannot be the cause for water shortage, and that considering this, the Authority should have proper planning.
“Most of the city’s water lines are old. Because of this, lots of water is misdirected, so they have to replace the old lines,” he said. “The Authority also should work on awareness creation, so citizens don’t use clean water for gardening and construction.”
Bureau Breaks Ground on 1.6b Br Headquarters
The Addis Abeba City Transport Bureau launched the construction of its office tower headquarters in Megenagna with a total investment of 1.6 billion Br.
The Transport Bureau complex has three underground and 21 above-ground floors. When completed, the complex will shelter the main offices of three of its subsidiaries: the Addis Abeba Transport Authority, the Drivers-Vehicles Follow Up Authority, which has branch offices in all 10 sub-cities, and the Licensing & Road Traffic Management Agency, which has offices in five sub-cities.
A new technology that indicates when there are electrical and drainage issues in the building makes the complex unique, according to Habtamu Nigussie.
The complex will save the Bureau the expenditure on office rent and will create a conducive working environment, he said.
As the complex harbors the three transport offices at a single premises, it will greatly minimise the bureaucratic delays by cutting the travel time and expense of customers trying to move from one office to the other.
The Addis Abeba City Transport Bureau headquarters will be built in on its own land in Yeka sub-city near Megenagna in an area comprising 5,500Sqm of land.
Obon Voyage Architects and Engineer’s Consultant Ltd will consult on the project, while the design was evaluated by Addis Abeba University’s Ethiopian Architecture Building and Urban Development Institute.
Zhongyang Construction Group, mainly involved in the development of infrastructure, industrial parks, innovative building materials and real estate is the contractor for the project, which is expected to be completed within two years.
Zhongyang secured the project after winning the bid that was announced by the Transport Bureau two months ago. Seven companies pre-qualified by meeting technical specifications and reached the financial stage after which the company was announced as the lowest bidder.
The project was initiated in June 2018, but it was delayed because of design revision and bid disqualification.
According to the design, the complex is expected to give an appealing look to the city.
During the construction phase, the project is expected to create employment opportunities for more than 500 citizens and will lead to hiring 600 people after completion.
The funding for the project will be fully covered by the City Administration, and the city’s Construction Bureau is managing the project.
Fekadu Gurmessa (PhD), a transport geography lecturer at Addis Abeba University for more than a decade, said, “The importance of having a headquarters for public institutions like the Transport Bureau is unquestionable. But it is not the only pre-condition for good civil service provision. Rather, it is essential to focus on human resource development.”
According to Fekadu, a headquarters without skilled manpower cannot achieve its objectives. The Bureau has to strive in investing in human resource development to resolve the urban transport problems of the city, he said.
Despite Court Freeze, Private Bank Grants Loan against Collateral
Amid a fierce court battle over the ownership of a housing unit, Nib International Bank approved a loan to one of its clients using the house as collateral.
Nib approved the 12.3 million Br loan to Bright Future Furniture Solar Plc on August 10, 2019, taking the house that is located in Bole District as collateral. The housing unit, which is constructed by Pan Africa Real Estate, is under a court injunction following a proceeding trial.
Before approving the loan, the Tiret Branch of Nib requested Bole District’s Land Development & Management Bureau Tenure Administration Transitional Period Service Project Office to check whether the land is free from any injunction.
In a letter that was sent to the Bank on August 14, 2019, the Project Office stated that the property does not have an injunction. Then the Bank disbursed 3.7 million Br of the loan to Bright Future on August 21, 2019.
However, on September 4, 2019, the Project Office sent another letter to Nib asserting that the property was under a court injunction. The Office also requested the Bank suspend the loan disbursement process. However, the letter had arrived at the Bank after the loan was already disbursed to the client.
The case was instigated when Tibebu Seletene, one of the disputing parties, took the case to court claiming Pan Africa Real Estate failed to deliver the housing unit it bought. In his charge, Tibebu claims that he entered a home purchase agreement with Pan Africa in May 2013 to receive a housing unit within seven months.
Tibebu also claimed Addis Bogale of Bright Future bought a house from Pan Africa in September 2014. Addis signed an agreement to buy a differently designed unit from Pan Africa, but in May of the same year he received the house that Tibebu had paid for, according to his claim.
Addis received a title deed from the District’s Project Office in May 2018. Tibebu has a contractual agreement he signed with the real estate firm.
After reviewing the case, the Arbitration Bench of the Ethiopian Chamber of Commerce & Sectoral Association has ruled in favour of Tibebu and ordered the real estate firm to handover the housing unit to the claimant. The arbitration tribunal also ordered Tibebu to pay 339,380 Br outstanding.
While the case has been under court review, Addis requested to intervene in the case, stating that he has a legal title deed for the disputed housing unit. However, the court rejected his intervention.
The real estate company appealed to the Cassation Bench, which sustained the ruling of the arbitration tribunal in December 2018. Then Tibebu proceeded to the execution of the judgment, returning the case to the Chamber’s tribunal, which put an injunction order on the 30,000Sqm parcel of land that is possessed by Pan Africa.
On March 25, 2019, Tibebu sent a letter to the Project Office requesting the annulment of a title deed given to Addis, attaching the court rulings.
The Office did not enforce the injunction order on the entire plot, since the whole land does not have a court liability and even some houses built on the property were transferred to home buyers who hold title deeds, according to Getachew.
In the middle of this, Bright Future requested the loan from Nib, which was then approved on August 10, 2019. Nib then required the District’s land management office to check whether the plot under Addis’s name was free from any court injunction or liability order.
“We sent a clearance to the Bank, since the property is registered under Addis’s name, not under Pan Africa’s,” said Getachew Addis, a legal expert at the Office.
On August 10, 2019, Tibebu went to the Project Office and requested them to specifically place an injunction order on Addis’s property, unlike the previous request, according to Getachew.
“He came to us after we sent the clearance to the Bank,” he said. “Then we wrote another letter to Nib informing them to suspend the loan process, but they informed us the money was already disbursed.”
Nib has followed the proper and legal procedures in disbursing the loan, according to Alemu Semaye, director of the credit appraisal department at Nib.
“We could take the case to court to recover the money,” Alemu told Fortune.
A legal expert who has the experience of working with banks says that Nib can take the case to court by citing article 3052 of the Civil Code that states that legal title deeds are valid.
“Ownership evidenced by title deed is valid notwithstanding that the title deed was issued based on an act which is invalidated unless the person who avails himself of the mortgage is shown to be in bad faith,” reads the article.
But still, the faith of the title deed owner will be in question while presenting the title deed,” said the expert.
The expert also said that Tibebe has to proceed with executing the judgement, since the Cassation Bench’s ruling is binding unless another court injunction is issued on the judgment.
The district’s land management office has already formed a five-member committee to investigate the case. In the meantime, Pan Africa has appealed, and the case is pending at High Court, which adjourned the case to November this year.
Eyuel of Pan Africa Real Estate declined to comment on the issue, since the case is pending in a court of law.
Addis says that he is not part of the court dispute and did not know about the court injunction, since the case is between Tibebu and Pan Africa.
“I bought the house legally and obtained an authentic ownership document,” he told Fortune.
Authority to Issue Telecom Operator, Service Provider Licenses
The Ethiopian Communications Authority, the new telecom and radio frequency regulatory agency, is considering issuing two types of telecommunications licenses for full operators and service providers.
In its draft regulatory framework made available for stakeholder consultation, the Authority proposes to issue unified and class licenses for operators and service providers, respectively.
Companies that will get unified licenses will engage with any telecommunications services including voice call, text, mobile data and wireless and fixed internet services as well as sending and receiving telecommunications to and from Ethiopia. A full-service license will be accompanied by a spectrum license that assigns specific blocks of the radio spectrum.
Class service license holders will buy bundle packages from operators to sell to clients. Class licensees can also engage in infrastructure development such as towers and fibre optic installations.
Unified, aka full-service, licenses will be provided for the three telecom operators, including Ethio telecom and the two new operators that are expected to join the industry within six months.
The draft regulatory framework, which covers details from licensing to regulating the operators, was availed to stakeholders last week before being approved and enacted. The consultation was launched on October 22, 2019, requesting stakeholders to submit their views on the proposed regulatory orientation. The consultation process will be open for four weeks.
The draft framework deals with the Authority’s mandate in setting prices and tariffs, internet and domain name administration, interconnection, dispute resolution, setting bandwidth, conducting quality control, acting in the government’s interest and not being captured, i.e. avoiding regulatory capture.
Once the Authority issues licenses for the two new telecom operators and Ethio telecom, it will not grant additional new licenses for at least three years, according to the proposed framework. The new operators can build their infrastructure or else lease and rent Ethio telecom’s existing infrastructure.
The two new operators and Ethio telecom will be licensed for 15 years, and their license is subject to renewal. The operators are required to keep at least three years of data on their clients. The Authority will regularly monitor the operators using its own equipment. The licensees are also required to submit their quality of service report to the Authority on a quarterly basis.
The regulatory framework forbids operators from charging extremely low tariffs compared with market prices, cross-subsidising [charging one group of consumers higher prices to artificially reduce prices for another group] and forcing customers to subscribe for bulk service.
It also proposed the operators contribute 1.5pc to 2.5pc of their gross revenue to the Universal Access Fund, which will be used to ensure that communications services are accessible to the largest number of users possible. Once the value is set after the consultation process, the Authority will forward recommendations to the Council of Ministers concerning the sources and amount of contributions to the Universal Access Fund.
During the first three weeks of the consultation process, the Authority will gather views from the stakeholders. It will also hold a conference on November 12, 2019, for a preliminary question-and-answer session with interested parties.
After collecting the feedback, the Authority will conduct a synthesis report and consider viable recommendations, according to Balcha Reba, director-general of the Authority, which was established in August of this year. Balcha, an electrical engineer by profession, has been in the telecom industry for a decade and a half. He was appointed to the post by Prime Minister Abiy Ahmed (PhD) in early September.
‘‘The whole process is expected to be finalised by November 30, 2019,’’ Balcha said.
Preparation of documents for a request for proposals (RFP) will follow the approval of the regulatory framework. The Ministry of Finance and the Authority are in the process of hiring a transaction advisor that will assist the government in the process of screening and licensing the telecom operators.
The RFP is expected to be finalised and sent to operators interested in joining the Ethiopian telecom industry by December 30, according to Balcha.
The Authority is scheduled to finalise all the screening processes and issue the two new licenses by the end of March 2020. Ethio telecom is also required to re-register and obtain a license with the new operators.
Liberalising the telecom industry, which has been under state control for over a century, since telecom service was introduced in the country by Emperor Menelik II, arrived as part of the ongoing economic reforms in the country. The reform also includes partially privatising Ethio telecom, the state monopoly operator, but retaining the majority share under the state’s control.
For the partial privatisation process of Ethio telecom, the Ministry of Finance is in the process of hiring a transaction advisor. Last month the Ministry requested that interested companies submit their expression of interest for the service.
A total of 22 companies showed interest in providing the service, according to Brook Taye (PhD), senior advisor at the Ministry of Finance.
‘‘We’ll shortlist eight to nine companies,” Brook said, ”and will send a request for proposals for these companies in one month.”
The government expects this process to be completed before the conclusion of this fiscal year.
Currently, the Authority is in the process of recruiting staff, including headhunting. It is also drafting directives dividing the process into three phases. In the first phase, which is expected to be finalised before November 30 of this year, the Authority will finalise directives related to licensing. The second phase is scheduled to be completed by March 30, 2020, while the last phase involves the drafting of the corporate and ethics manual.
TACON Wins Machinery Rental Dispute at Cassation Bench
Justices at the Cassation Bench closed the bitter court battle between a local machinery rental company and a prominent construction firm over a construction equipment rental agreement in favour of the latter.
Presided over by Chief Justice Meaza Ashenafi, the Cassation Bench of the Federal Supreme Court has turned down the appeal of Prosper International Plc, which has been fighting with Tekleberhan Ambaye Construction Plc (TACON) over a construction machinery rental contract for several years.
TACON rented two wheel loaders and a bulldozer from Prosper for the civil work it had under contract for Yayu Fertilizer Factory in Yayu Wereda, in Oromia, 600Km west of the capital. Metal & Engineering Corporation (MetEC) subcontracted the civil work to TACON at a cost of two billion Birr.
For the two loaders, the disputing parties contracted for 400 hours each and 500 hours for the bulldozer. TACON paid 460,000 Br for the loaders and 1.05 million Br for the bulldozer up front.
However, a legal ordeal between the duo was started at the Federal High Court in 2014 when TACON sued Prosper to retrieve 204,460 Br from the advance payment. The construction company claimed Prosper had to return the amount it made for the two wheel loaders, which broke down without serving out the contract time.
TACON requested the payback, claiming that the loaders suffered mechanical problems that forced a stoppage of operations in August 2012 and that they worked for only 445 hours. Also, TACON claimed the rainy season rendered the equipment unusable.
In the middle of the trial, Prosper countersued TACON, arguing that the loaders did not provide service, not because they were broken down, but because TACON let them idle with no orders to accomplish. Prosper also argued that TACON must pay 6.8 million Br for the time the machines remained idle and return the machines as per the contract.
The High Court, which reviewed both cases, rejected the claims. The judge also affirmed that TACON did not present evidence to prove it had given notice about the malfunctioning of the machinery to Prosper. The Court also stated that Prosper had already taken the full payment for the equipment, and there is no money TACON is required to pay to Prosper. The Supreme Court sustained the lower Court’s ruling.
It triggered Prosper to take the case to the Cassation Bench, the last hierarchy in the court system. With an appeal dated September 4, 2017, Prosper stated to the Cassation Bench that the lower courts made an error of law in their rulings.
With an appeal filed on June 11, 2019, the respondent, TACON, asserted that Prosper opened the file after a year and five months of the Supreme Court’s ruling, while the file was registered with a date of September 4, 2017.
“After cross-checking the file with the registrar, we’ve found that the applicant opened the file on November 15, 2018, not in September 2017,” reads the appeal from TACON.
In its response filed on July 17, 2019, Prosper stated that the appeal was filed before the period of limitation expired and the registrar had registered the file. Prosper also argued that there is not a specified date stated in the law and that any file should move to trial after it is filed.
The Registrar of the Court was also summoned and appeared before the Court to explain the case. The Registrar asserted that on November 15, 2018, the applicant presented a letter from another registrar showing the file was already opened before the period of limitation passed.
On the last court session that was held on October 10, 2019, the five justices who reviewed the case affirmed that Prosper started an application for a hearing in cassation within three months of the latest court ruling. However, the company did not pay a court fee, which meant that Prosper did not finalise the process in the period of limitation, according to the justices.
The justices also ruled that the Registrar did not follow the proper procedure in allowing Prosper to open a file after the period of limitation passed.
“Thus, without reviewing the main case,” reads the judgement, “we’ve rejected the appeal since it was filed without following the proper procedure.”
In the federal courts’ proclamation, an application for a hearing in cassation shall be instituted within 90 days from the date on which the final decision is rendered.
Nega Getaneh, the in-house counsel of TACON, said that his company will hold the Registrar accountable for the act that is against his company.
“We’ll file administrative grievances toward the Registrar for opening a file after the period of limitation passed,” Nega told Fortune.
Tulu Moye Hires Geothermal Driller
Tulu Moye Geothermal Operations Plc (TMGO) has hired a drilling contractor for its two-phase geothermal project with an estimated capacity of generating 150MW.
The drilling contract signed by the CEO of Kenya-based KenGen, Rebecca Miano, and Darrell Boyd, CEO of TMGO, states that the agreement advances geothermal energy, which in turn encourages sustainable development in Ethiopia.
The Tulu Moye geothermal prospect site is situated in the Ethiopian Rift Valley in Oromia Regional State.
According to Yitemgeta Fantu, the chief deputy technical officer of TMGO, the company conducted a study for the last eight years on the site, a place located 50Km away from Adama, close to the eastern margin of the Rift Valley. The area has high tectonic and volcanic activities.
Phase one of the project will generate 50MW of power, while the second phase is planned to have an output of 100MW, which will be sold to the Ethiopian Electric Power Authority.
Tulu Moye floated an international competitive bid before awarding the contract to KenGen over two other competitors. Tulu Moye and KenGen officially started negotiations in February 2019.
TMGO will design, finance, build, operate and maintain the geothermal power plant.
According to Yitemgeta, geothermal processing requires three procedures. The first process is identifying potential locations, the second is constructing roads to the site and the third one is drilling wells. KenGen is expected to carry out the drilling for phase 1 by drilling 10 wells, each with the capacity of producing 15MW and two additional wells for the condensed water. However, the Kenyan company will not have a role in power generation activities.
Phase 1 of the project has an estimated cost of 260 million dollars, and the second phase will cost 540 million dollars. The capital funding, which is covered by Meridian and Reykjavik Geothermal (RG) Company, will be managed by TMGO. The first phase is planned to be completed by September 2022.
Geothermal power was not considered as important as mineral mining before a proclamation administered by the Ministry of Mines & Petroleum was approved in 2016 that regulates geothermal operations.
In 2017, the Geothermal Resources Development License and Administration Directorate was set up under the wing of the Ethiopian Energy Authority to issue licenses to explore geothermal resources.
“The project is expected to generate power for the next 50 years and plays a significant role in technology transfer,” said Yitemgeta. The Plc has a 25-year agreement to sell power to the government. By mid-January, KenGen will start drilling.
Tadesse mamo, former senior expert geologist at the Geothermal and Geological Survey of Ethiopia explained several advantages of geothermal energy. “It is guaranteed that there is a huge potential of the geothermal resource in Ethiopia, and geothermal power is not affected by drought unlike hydro and other types of resources.”
According to the expert, using geothermal energy is an advanced and new science. So the partnership between KenGen and Tulu Moye will have a great role in innovation and technology transfer.
Aklilu Hailu, a geophysicist who worked in the geothermal sector for the past 21 years, remarked that the project will help the country to get a large amount of geothermal wealth. “One of the special features of geothermal energy that makes it different from other sources of power is that it can be established on a small surface area,” said Aklilu.
Both experts indicated that if Ethiopia utilises this sort of energy, the country would have the ability to become a centre of excellence in power generation.
Tech Firm Launches App to Connect Home Buyers with Sellers
A local tech firm has developed a mobile application that links up house owners and real estate agents with buyers.
DSD Computer Technology Plc developed Ethio-rental, a programme that aims at saving time and money for buyers and sellers. The app is available on both Google Play and the Apple App Store starting from October 23, 2019.
The application, which took eight months to be launched, also helps property owners and dealers advertise houses. It is developed by lecturers from Jimma University and experts from Australia and the United Kingdom. The application operates in three languages: Amharic, Afaan Oromo and English.
The application will solve common problems around selling and renting houses, according to Debela Tesfay (PhD), general manager at DSD.
“Selling or traditionally renting a house can be extremely time consuming, costly and stressful,” he said.
For registration, home seekers will make no payment, while the real state agents are expected to pay for registration, and they are expected to renew their subscriptions every six months. They will also upload eye-catching, crisp and bright photos of the houses.
The company expects to have 1,000 commission agents, who have renewed business licenses and act as a bridge to connect customers and the company, which was established in 2014 with 25 million Br in capital.
DSD Computer has started giving training to commission agents on how to use the application. After the training, the commission agents are expected to sign a contract agreement with the company.
For non-smart phone users, the company has also prepared a call centre, which will receive calls from clients and provide the callers with the required information.
A year ago, the company launched an application and text-based taxi-hailing system called Michu, but due to issues related to government regulations, the system is not currently functional.
Girum Bekele, director at Home Net Commission Agent, is excited with the new application.
“But I wish that the company would charge a fair and lesser fee and come up with diversified services,” he said.
Obsa Negassa (PhD), a business developer at DSD, says that the company is working on diversifying its products.
“We’ll come up with different projects in the future,” Obsa said.
Henok Eferem, an IT expert and a lecturer, says that the application is advantageous in changing manual service to digital and by saving time and money by increasing efficiency.
But Henok fears that people will not widely use the application.
“How many people can use information technology in their daily activities,” said Henok.
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