Fortune News | Sep 14,2019
The Addis Abeba Finance Bureau blocked a multi-billion Birr budget the city administration approved after requests to pay bid winners in foreign currency gets rejected.
Under Debo Tunka, the Addis Abeba City Administration Mega Project Construction Office asked the Finance Bureau for feedback as the term of reference in the bid documents demands a foreign currency payment of 20pc. However, the Bureau responded that giving approval for payments in foreign currency is the central bank's mandate.
The bureau is willing to revise its decision once the payment terms are changed.
Officials of the Bureau were not pleased to see a strain on the city administration's budget when the Mega Project Office paid 80pc in foreign currency for renovating the municipality complex up Churchill Road, housing the Mayor's Office.
"The Finance Bureau was disbursing from the annual budget," said Mebratu Gebre, budget office director.
The renovation, costing taxpayers 2.2 billion Br, facelifted the complex for the first time in 57 years. It was constructed during the reign of Emperor Haileselassie, designed by an Italian architect Arturo Mezzedimi and constructed by the Italian firm ESBU Construction. The iconic structure was renovated by ALEC Engineering & Contracting LLC, a Dubai-based company that also restored the Prime Minister's Office.
The Mega Project Office, established to oversee public projects costing over a billion Birr, was awaiting the green light from the Finance Bureau to enter into a contract to award a sectoral office district. To be administered under the Public Property Administration Authority, the office project will house 38 bureaus in the same location, making them accessible for residents across the city to get various administrative services.
The construction will be erected on 11.5hct of land on Tessema Aba Kemaw Street, adjacent to Tekelehaymanot Church, to be completed in three years.
Abinet Belay, an investment consultant for MPE Consult, questions the feasibility and timing of spending a large amount of money on extravagant office facilities when there are budget deficits not only in the city but at the federal level.
"I would advise them to see other areas that can generate revenues," said Abinet.
The Project would have four lots, and the construction firms winning the bids would design and build the offices.
The office cluster was initially planned to be constructed on a plot adjacent to the Ethiopian Management Institute, across Sahlite Meheret Church, on the road between Megegnaga and Ayat. The first lot awarded to the China Communication Construction Corporation for close to 29.9 billion Br was scrapped. China Jiangsu International Economic & Technical Limited took the second lot for 8.8 billion Br. The remaining two lots were awarded to China Civil Engineering Construction Corporation Ltd, with a total value of 19.2 billion Br, making the total project cost 28 billion Br.
The Addis Ababa City Administration approved a 100 billion Br budget for the current fiscal year, while 7.1 billion Br was appropriated for the mega projects. However, three mega project construction contracts valued at over 30 billion Br have been awarded to contractors this year. They include cluster zone (7.7 billion Br), agricultural produces market (six billion Birr) and sectoral office projects.
Despite the delay in implementation, the project news is eagerly awaited by thousands of employees under the city's administration dispersed and cramped in several offices. According to Paulos Birhanu, deputy head of the Addis Abeba Public Property Administration Authority, the city administration has been spending over one billion Birr annually for office rentals.
"It's aimed at saving rental expenses," said Paulos.
It is also hoped to create better work environments for those working in uncomfortable spaces settled in areas inconvenient to city residents.
The Addis Abeba Trade Bureau is one of 38 administrative offices that will be shuffled into the sectoral district. It provides service housed on five floors at the Arada Building near General de Gaulle Square. Over 200 staff provide trade license registration and renewal services for more than 60,000 businesses.
"During pick seasons, 100 clients on average visit the office," said Daniel Ligosa, the Bureau's communications director.
The absence of parking lots and discomfort in waiting areas are among the complaints Daniel encounter in his daily routine.
The same is true for the city's Health Bureau, which pays 1.8 million Br monthly rent for the eight-storey building in the Megenagna area.
According to Seife Demisse, head of equipment supply, the building was constructed for a hotel, and changing the rooms to office purposes has been challenging.
"We work here because we have no other option," he told Fortune.
The inadequate rooms for more than 300 staff forced the Bureau to share one office for close to 10.
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