The start of registration for the Addis Abeba Saving Houses Department Enterprise’s (AASHD) 40/60 housing scheme, on Monday, August 12, 2013, was marked by long queues throughout various branches of the Commercial Bank of Ethiopia (CBE).
Tadele Ayele, 39, a tax collector at Gulele District lives in a kebele house in Wereda 7 of the same District. He registered for a two-bedroom mini-apartment, on Tuesday, at the CBE’s Arada Branch. He is expected to pay 1,575 Br a month for five years, saving a total of 100,000 Br during that time. He and his wife each make 2,400 Br a month; he likens the commitment to donating blood.
Although the 40/60 housing scheme is the third type of housing scheme to be introduced, after the 10/90 and 20/80, it is the first one to allow the registration of members of the Diaspora. As a result, there was a long queue and some chaos in the attempt to complete registration and payment in the courtyard of the Addis Abeba Urban Management Institute, on Wednesday, August 14, 2013.
Sergie Birhanu, 29, came back to his home country a month ago, after 10 years in Moscow, Russia. He stood alone, away from the long queue. He came to Ethiopia for a vacation, but after hearing the 40/60 housing scheme gave priority to those who can pay in full, he decided to register.
Since Monday, about 77,000 individuals, including around 3,000 from the Diaspora, have registered, according to the available data at the CBE.
“The number is increasing and will continue to do so,” says Ephraim Mekuria, communications director at the CBE.
He adds that 1,300 have already made the full payment.
In the 40/60 housing scheme alone, 50,000 houses will be built at the cost of 26.05 billion Br. A total of 10,000 of them will be completed during the 2014/15 fiscal year. The financing will be secured from “different finance sources”, according to the executive summary of activities released by the Addis Abeba City Administration, in July 2013. Achieving that may surprise some.
“It does not seem to be realistic,” says Merara Gudina, (Phd)chair of the Forum for Justice & Democracy (Medrek) Party. “Even the developed countries cannot do it.”
During the 2013/14 fiscal year, the government plans to collect six billion Birr through the 20/80 and 10/90 housing schemes. More money is expected from the 40/60 scheme, although it is not pre-planned, Ephraim says.
The Administration also plans to transfer 26,000 houses under the 20/80 and 14,000 houses, for the first time, under the 10/90 scheme, in 2013/14. Close to 3,000 of these units will be stores for rent. On the other hand, the number of home-seekers registered for the 10/90 and 20/80 schemes alone reached 860,000, from June 10 to 28, 2013. Moreover, those registered are expected to save money for at least the next 18 months. The total amount of money for transferring a house varies from 162,645 Br to 386,400 Br, for one-bedroom and three-bedroom units, respectively.
In turn, the government is supposed to deliver the houses in the next five years. Due to previous experience, however, the government is faced with questions on its ability to deliver. For instance, a number of people who registered in 2005 are still awaiting the delivery of their homes. More than 1.3 million people are expected to register for the three schemes this year.
The Enterprise, which has collected a total of five billion Birr since the start of the housing scheme in 2005, has built and transferred only 100,000 housing units over the last eight years. It aims, however, to transfer 50,000 units during the current fiscal year. From this, it plans to collect 20pc and 10pc of the down payments, from the 20/80 and 10/90 housing schemes, respectively. This is expected to net the enterprise a total of between 1.5 billion and two billion Br.
Sergie is happy that the 40/60 housing scheme gives priority to people like him, who can pay in full. This is unlike other schemes, which assign houses through a lottery, regardless of the ability to pay. However, he has the same level of confidence as Merara on the delivery of the house he has purchased.
Currently, the first projects are under construction in Sengatera, Lideta District, to the south east of the Ministry of Urban Development & Construction(MoUDC)on Ras Abebe Aregay street. They consist of 405 units in five 12-storey blocks, which come with two basement houses. Construction & Design Share Company and Habtamu International Engineers & Architects Plc are the consultants. Additionally, 12 different level one contractors are involved.
The houses are expected to be completed within around 300 days, as per the agreement signed between the contractors and the AASHD. The construction is, however, still at the foundation level, known as the sub-structure, according to Fayzel Seid, project engineer with Equator Engineering Construction Plc, one of the contractors.
As of now, the blocks are only 16.73pc complete, according to data from the MoUDC.
“Supply constraints often occur; this will affect the delivery,” Fayzen says.
The AASHD, however, wants some praise for starting earlier.
“The fact that construction began before the start of registration should be appreciated,” claims Yonas Abayneh, its communication director.
The Enterprise is, however, working with contractors to speed up construction by increasing manpower, machines and working hours, according to Yonas.
The AASHD considers the fact that the cement and iron bar supply during the last fiscal year was more than what was planned. While it planned to supply 46,600tns of cement, it provided public universities and other public projects with 95,908.59tns. This shows a 205.8pc increment, according to the annual report presented by the MoUDC.
It was also able to provide 477,269.4tns of cement, while its plan was a slightly lower at 466,800tns. It also boasts exceeding its plan of delivering 600,000 agrostone panels, attaining a total of 642,613.
The delivery of houses, however, has not been as smooth and easy as expected. There are people who have not received their houses yet.
Situations, which may initially seem insignificant, can hinder the overall construction process, contributing their own share to the delay, according to Faizan. Site handover and advance payment were identified as being among the challenges.
Citing the fact that contractors were forced to facilitate preconstruction processes, such as constructing access roads inside the site, something that the Enterprise should have built per the agreement, Faizen says the construction may not necessarily be completed on time.
“It may be extended because of such small but significant reasons,” he says.
The existence of small-scale enterprises is also a source of possible delays for Faizen. There are about 1,000 small-scale enterprises, contractors and consultants created as a result of the construction of the houses.
“We have to let them do the finishing. We cannot select who does the finishing. This plays its own part in delaying the project, given that we cannot push them to accomplish their activities on time,” says Faizan.
In eight sites, including Crown Megenagna, Meri, Bole Bulbula and Asko, 173 blocks have been awarded to 87 contractors.
“From the previous trend, we used to award two blocks for a contractor. But, depending on the situation, we will award up to four for each contractor now,” Sewlsew Abere, construction works supervision team leader, told Fortune.
The number of contractors interested in doing the job, however, does not seem to be as many as expected. Equator Engineering Plc, which is among the first level contractors, does not plan to continue beyond the initial project, according to Faizan.
“It is not as beneficial as previously,” he said.
The Addis Abeba Housing Administration & Development Agency, however, dismisses doubts regarding its ability to deliver such a large number of units on time.
“By now, we have enough experience to deliver the planned 50,000 houses faster than ever,” contends Mesfin Mengiste, head of the Agency.
Professor Abebe Dinku, chairperson of the department of Construction Technology and Maintenance at Addis Abeba University, advises that the Agency should take issues, such as quality and site selection, seriously.
“The plan can be appreciated. Yet, our experience with condominium houses tells us that the issues are too serious and can in no way be overlooked,” he contends.
He also wants to see the private sector getting more opportunities in the industry, arguing that they could better ensure quality.
Currently, it is only the government that is engaged in the construction process. This is contradictory to the economic policy of the country, according to the expert.
While debate continues on the details of the construction process, house-seekers, such as Tadele and Sergie, continue to have uncertainties regarding their future homeownership.
“Whether I will actually be a homeowner, only God knows it,” says Tadele.
One thing he is sure is that he will continue to struggle to make the required monthly savings.
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