The facilities of Nigma Motors Plc, automobile assembler established by the Ethiopian Nigma Agro-Industry Plc and the Ukrainian car maker, Zaporiziha Automobile Building Plant Company (ZAZ), have been partially demolished as illegal construction by the Wereda 10 Administration of the Gullele District. Yet, this is the Administration that had given the permit for the construction two years earlier although it knew Nigma did not have a title deed for the land.
Nigma, which said its plant is worth 1.5 million dollars, stopped the demolition, which started on Monday January 9, 2016, with a court injunction the following day.
The Wereda’s Building Permit & Inspection Office had given the company only three days’ notice before starting demolition.
The plant rests on a 3,700sqm plot of land around General Wingate; this plot is part of the 7,000sqm of land which, one of the shareholders, Berhanu Zewde (PhD), has been using for brick production and other purposes. However, Daniel Tamrat, Nigma’s marketing & sales manager, says that Berhanu, too, does not have a title deed. Nigma has been assembling vehicles at semi-knockdown level. It imports vehicle parts from Ukraine, where the painting work is also undertaken. It has assembled and sold four models: Forza, Vida, Chance and Sense.
Nigma started is one of only six that have become operational among the 31 foreign and 73 local companies licensed to engage in vehicle assembly since 1998, data from the Investment Commission updated in February 2015 show.
Nigma shared Berhanu’s land after waiting six months for the City Administration to respond to its request for land, according to a letter Berhanu wrote to the City’s Mayor, Deriba Kuma. When the City failed to respond for six months, however, the District says that it allowed the company to operate on the land before acquiring title deed because of the “urgency” and the “job opportunities” it created. This was stated in a letter the District sent to the Investment Agency on March 28, 2014, answering the latter’s question posed four days earlier, regarding whether Nigma’s project was allowed to use the land for the construction of the plant. Legalizing the landholding would be resolved through a directive, the letter stated.
An exchange of letters between the concerned agencies and the company ensued between 2013 and 2015.
The most recent letter from the Ethiopian Investment Commission written to the Gullele District Land Development & Management Office dated December 10, 2015, indicates that Nigma had been stopped from using the land in a letter the District had written to the company on December 6, 2015. The company survived that, through a support letter written in favour of its operations, signed by Likyelesh Abay, the Commission’s deputy director.
This letter stated as the reason for the Commission’s support: “The Company saves foreign exchange and makes a contribution to our country’s economy and creating such problems at a time when our country is working hard to draw foreign investment, will deter foreign investors from coming to our country and from trusting our government.”
During the last and the current fiscal year, the District had been posting warning notices to stop construction but Nigma had proceeded with its operations. It was “trying to process and legalize the land,” said Daniel.
Following the start of the plant’s demolition, Berhanu sent yet another letter to the Mayor’s Office, expressing the company’s grievance over the action taken. The letter questioned why the office had kept silent during the past two years while the construction was going on and chose act at this point of time.
“We have taken the measure based on directives,” said Tariku Tadesse, construction expert at the Office. “A construction project that takes place on illegally used land is automatically illegal,” he said. He added that the delay to take measures was probably caused by the reluctance and hesitation of the Administration to act.
The Land Development & Management Office will appear before the Federal First Instance Court at Lideta on February 5, 2016, to explain its action.
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