City to Let Contractors Buy Supplies

The new approach is meant to speed up housing construction


Unable to meet its homes building goals, the Addis Abeba City Administration is considering transferring the purchases of construction materials for city projects to be handled by the contractors themselves. The Ministry of Urban & Housing Development has already approved the new arrangement.

So far there are almost one million people registered for condominiums in Addis Abeba. However, since its inception in 2005, only about 175,000 low-cost condominiums have been built and transferred so far. It is predicted that Addis Abeba’s population is expected to reach eight million in the next three years.

At the current rate of construction and transfer of homes, the City Administration will be able to provide housing for the million people currently registered in roughly within 68 years. The 40/60 housing project, which has 160,000 people registered, has not transferred a single condominium yet.

Until now, any purchases related to housing projects, including ceramic tiles, reinforcement bars, and electrical equipment was done by a project office under Addis Abeba Housing Construction Agency (AAHCA). Currently, there are close to 2,500 contractors participating in housing projects across the city.

Now, the individual contractors who are awarded housing projects in Addis Abeba will be able to make the purchases on their own.

Turning the procurement process over to contractors will minimize recurrent delays in the purchasing process, according to a senior government official who has been in the agency for more than three years.

Last year, the government only supplied 86pc of cement, 69pc of agro-stone partition boards and 44pc of gravel required by housing projects. This year alone, around 8.5 billion Br budget is allocated to the Agency. Over the years, the Agency saves 10pc to 15pc cost advantage from bulk purchases.

The project office under the Agency has a list of 520 items that it bulk purchases.

With the new approach, the Office will prepare a fixed price list that contractors will use as a guide. Except for some strategic purchases of steel bars and electric materials, the rest will be left to contractors.

Contractors can manage the price and purchase of steel bars and electric material, said the same official.

In addition, people who receive the houses they are registered for will have the chance to choose ceramic tiles and bathroom materials.

Things like gravel and sand for the projects were supplied by small and medium enterprises. Currently, there are more than 13,000 micro and small enterprises involved in different capacities and aspects of the housing project. Last year, the AAHCA employed 4,311 such enterprises.

“It is a good plan,” said a contractor who has been involved in housing projects for the past five years. “But they should address problems related to delays and poor quality designs.”

“There will be increased demand with time,” said the housing agency official.

The city has planned to build 350,000 homes during the second edition of the Growth and Transformation Plan.

“The project office will only have the mandate of controlling the quality of materials which will be purchased by the contractors,” said a project official.

After the ministry receives comments from regional offices as well as contractors, it will be sent to the Ministry.

“We are waiting for their decision,” said Tadesse G. Giorgis, head of Housing Bureau at the Ministry.



Published on Feb 07,2017 [ Vol 17 ,No 875]



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