The Ethiopian Road Authority signed agreements for the construction of a network of roads totaling nearly 724Km for 16.3 billion Br.
The agreement encompasses 10 road projects across Amhara, Oromia, SNNPR, Somalia and Gambella regions. The agreements were signed by Habtamu Tegegne, head of the Ethiopian Roads Authority, and the representatives of five local and five foreign firms on December 13, 2018.
The construction is expected to be completed within two years and 54 months, depending on the project type. The road networks, which include the construction of bridges and water drainage systems, will be between seven meters and 10m in width in rural areas and between 12m and 25m wide in urban areas.
The total cost of the road projects will be covered by Ethiopia’s government, except the Gore-Masha-Tepii road project, the most expensive and longest road of the cluster, at 140Km of length and costing 3.8 billion Br.
The contract for the road project was awarded to Hyundai Development Company, a Korean real estate development and construction firm. Only 12pc of its cost will be covered by the government, while the Export-Import Bank of Korea will finance the rest in the form of a loan.
The other foreign firms awarded projects were Beijing Urban Construction Group, China Civil Engineering Construction Corporation, Ziji Young Bayoung Hay and Hebey Construction Group. They were awarded the construction of a 290Km long network of roads for 6.8 billion Br.
The local construction firm that entered into contracts to construct portions of the road networks are Derba Defersha General Contractor, Alemayehu Ketema Contractor, Defence Construction Enterprise, Samson Cherenet General Contractor and NKH Construction.
The local firms will construct a 293Km long road network in Amhara, SNNPR and Oromia regional states valued at almost 5.7 billion Br.
A 35Km road that extends between Lare-Negnege-Jikawo has the highest value on a per kilometere basis at 40.6 million Br. The 74Km road from Omorate-Omo-Kangaten has the lowest value with 12 million Br a kilometre.
During the signing ceremony, Habtamu asserted that the construction of the roads has economic and social benefits. “We should cooperate actively with communities in the areas to complete the projects within the scheduled time frame,” he said.
Tsegaye Tsara, administrator of the Dita Zone, one of the beneficiaries of the road projects, agreed with Habtamu.
“The area is well known for the production of corn, bananas, barley and apples,” Tsegaye told Fortune. “The construction of the road will make it easy for farmers to connect to the market to sell their products.”
The award of these road projects comes after the construction launch of the 79Km Jimma-Agaro-Dedessa road at a cost of 1.3 billion Br. The road, which was started on October 24, 2018, will cost the government 16.5 million Br a kilometre.
The project, awarded to China Railway 21st Bureau Group, includes the upgrading of existing road networks and the maintenance of the Dedessa Bridge. The Road Authority hired Omega Consulting Engineering and Prome Consultant to supervise the projects jointly.
The road will have a 22.5m width in urban areas and a 7.10m width in rural areas. Expected to be completed within 41 months, its total cost will be covered by the government.
“Projects with higher surplus production should be prioritised since we are resource-constrained,” said Getachew Yirga, an assistant professor at Bahir Dar University’s College of Business & Economics. “It is also important to give second priority to areas that have a higher average distance from an asphalt road.”
The nation spends billions every year for the construction of road projects in keeping with the Second Edition of the Growth & Transformation Plan (GTP II) to almost double road coverage in Ethiopia to 220,000Km by 2020. Only 120,171Km has been paved to date, however.
(Dawit Astatike, Fortune staff writer has contributed to this story).