Radar | Sep 06,2020
The damage sustained by construction projects in Tigray Regional State during the civil war is set to be assessed following the peace agreement between the federal government and TPLF forces. The Ethiopian Roads Administration (ERA) floated a national tender looking for experts three weeks ago.
Under the Ministry of Urban Development & Infrastructure, the Administration hired eight experts to assess the project sites in the Amhara Regional State on damages a year ago. The Deputy Head, Dejene Fikadu, selected the road projects to be evaluated where close to 19 projects managed to submit the cost claim with the evidence.
The contractors from both regional states requested eight billion Birr in compensation for the destruction of construction equipment, campsites, and fuel.
The Ministry's half-year performance report presented to the Urban Infrastructure & Transport standing committee at the Parliament last week revealed the Administration under the former Director General Habtamu Tegegne failed to complete 49 projects, of which 19 were in the Oromia Regional State. The rising cost of construction materials, the forex crunch, and the competence of the construction companies were attributed to the failure while security reasons were mentioned for projects in Nekemt and western Wellega towns.
Based on the assessment and valuation, the Administration must settle the loss or negotiate, provided the amount is high. The foreign construction companies may proceed to the International Chamber of Commerce if the issue is not settled, according to Dejene. The final findings of experts coupled with the claims are expected to be tabled to the macro-economic committee chaired by the Prime Minister before the cases of foreign contractors reach the international chamber.
"It may cause additional expenditure," he said.
The Administration received a 70 billion Br capital budget in the fiscal year, unbefitting the demand for existing projects. Last year, the Ministry of Finance nodded a 60 billion Br cost adjustment to 800 public projects funded by the federal government.
Established 13 years ago, Melcon Construction Plc has two road projects with the Administration halted during the war. The Adiremets-Adigoshu road reached 80pc completion, while the Rama-Chila road was halted right after the commencement.
Melkam Kumlachew, one of the two major shareholders, believes the damage estimated six months ago at 1.5 billion Br does not determine the prevailing value. She said being unable to move resources from the sites has limited the company's performance on other projects. The company currently has three projects with the Administration, such as the 4.3 billion Br road connecting Dangla and Chagni towns in Amhara Regional State.
State-owned construction companies did not escape from sustaining damage.
The 14Km asphalt road of Gishen Junction, listed among the two projects of Ethiopian Construction Works Corporation to be assessed, was projected to be operational in two years and a half with the Corporation bagging the contract for 1.3 billion Br two years ago.
The Corporation, despite losing 142 million Br worth of materials and machinery, is committed to bringing the road to the finish line, according to Tinfu Muche, communication head. He urges the Administration to push the deadline taking the situation into account.
Experts have their say on the unpredictability. Abebe Dinku (Prof.) is the head of Construction Materials & Management at the Addis Abeba Institute of Technology with two decades of experience in the construction field. He underlined the necessity of terms and references on the contracts to navigate such situations. The expert recommends contractors be insured for unforeseen circumstances.
"It's a risky business," he said.
PUBLISHED ON Feb 04,2023 [ VOL 23 , NO 1188]
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