Fortune News | Jan 19,2019
Thousands of developers in Addis Abeba foresee extensions on project completion time by the Addis Ababa City Cabinet, which has been dealing with the issue for two years.
The plots have been leased since 2005 for investments in mixed-use residential apartments.
Developers attribute failure to meet deadlines to soaring construction materials and inputs prices and frequent suspensions on land-related services. They have been lodging complaints to the Land Management & Developement Bureau.
This comes following Mayor Adanech Abiebie's announcement two weeks ago that the City Administration would resume the land lease regime after two years hiatus, making 100 plots available to the market through the auction process.
A law passed in 2004 compels developers to begin projects within two and half years after they were issued construction permits. The duration extends by five years for large-scale and complex constructions. However, a revised law in 2011 brought down the time between two to five years, depending on the size of the projects.
Further details on the deadline extension will be discussed with developers in the coming weeks, disclosed Desta Mergia, director of Land Transfer & Administration.
Biruk Henok is one of the developers who leased a 1,000Sqm plot in Lemi Kura, the new district in the capital composed of vicinities in the Bole and Yeka districts.
He leased the plot through an auction, held before the new city administration took office, for 18,000 Br for a square meter. Progress on constructing a mixed-use apartment was halted for three years after 30pc was completed. Unable to settle his arrears in lease payments, Brook had to wait until the compounded interest died down.
The City Administration's moratorium on land-related services a year ago was another hurdle for Biruk not to proceed with the construction. The City Administration lowered interest rates for lease payments last year. Desta said developers might be exempted from penalty fees depending on their cases.
"It's better late than never," Biruk told Fortune.
Over 100 developers in the Akaki-Qality District were waiting for further explanation. Many are organised under housing cooperatives to build housing units. The extension could stay for up to nine months, said Addisu Chiquala, Land Transfer & Administration Coordinator in the District,
Addis Abeba Construction Permit & Control Authority is mandated to renew building permits in the capital. It delegates wereda offices to grant construction permits for two-storey buildings while districts are responsible for up to 10-storeys. Under Setotaw Akale, the Authority issued 1,159 construction permits during the first quarter of this year.
Lease agreements are to be renewed with the Land Management Bureaus before developers get the permits, said Setotaw.
A few weeks ago, the Bureau headed by Kenea Yadeta called 76 developers, offering them to explain why they failed to follow through within the period granted.
For legal experts such as Tilahun Gizaw, the problem lies in the lease proclamation. It lacks clarity on construction delays caused by disputes over a right-of-way. Officials at the district level do not settle disputes and claims before transferring plots to the developers.
PUBLISHED ON Nov 19,2022 [ VOL 23 , NO 1177]
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