Contractors registered in Amhara Regional State are uneasy about the price adjustments made on the contractual agreements of unfinished projects by the administration. They claim the adjustment had only taken into account projects funded by the government, leaving out international institutions financing the projects in joint ventures.

According to the letter submitted by the Amhara Region Construction Contractors Association three weeks ago, authorities require foreign corporates to review the prices on the agreement, as they are operating within the country's laws. However, Tilahun Mehari, head of the Amhara Regional State Finance Bureau, said the regional state has no mandate to impose such a request.

"They've their own ways of conducting business," Tilahun told Fortune.

The Association lobbying for 500 members registered in the Amhara Regional State has submitted its inquiry on other points its members deemed not considered, signed by its President Muluken Bitew.

The adjusted price takes into account projects that began from April 2022 onwards leaving the constructions with a previous start date hanging, despite the inflationary wave that started to hit the sector way before.

"It's better than nothing, but not enough," said Muluken.

The absence of a formula remained a headache for several administrations until a committee comprising members from the Association, Ministry of Finance and Construction Works Regulatory Authority conducted the study to set a uniform calculation that was tabled for the final say.

Last June, the regional council approved a 30pc price increase for construction projects as of April 2022. Construction of buildings, irrigation dams, bridges and underground works, were included in the price adjustments taking 60pc of the remaining work into account.

According to Tilahun, the rate was raised once more following the reluctance to complete contractual obligations, requesting employers to apply the readjusted price last month.

The Amhara Regional State allotted five billion Birr to the capital projects, of the 95 billion Br budget for the fiscal year. The recent price adjustment requires the regional state to spend six billion Birr, exceeding its budget by a billion Birr.

The authorities at Amhara Regional State decided to focus on finishing the projects at hand rather than planning for new ones, with most failing to see the end within the deadlines.

Kindeye Fikadu is indifferent to the adjustment after comparing it with the exponential costs of construction inputs. He took on a project to be completed in four months but claims he could not deliver on time due to budgetary constraints.

Licensed as a grade 4 construction company, Kindeye entered the sector five years ago with an initial capital of 531,000 Br.

He recalls the price of steel had increased by 2,000 Br among other things, after signing the contractual agreement that forced him to sell one of his three trucks for 1.8 million Br to keep up with the costs and deliver the project in January, half a year past the deadline.