Delays in Mega Projects Bleed the Nation

Authorities positive about recommendations, but seek to see the details first  

Three road projects, two dams and one hospital financed with public money have run short of time and price, consuming far more money than originally designed, hence pressure on public coffers, a new survey discovered.

The Adiremet-Dejen Dansha, Azezo-Gorgora, Mhal Meda-Alem Ketema road projects, the Ribb and Tendaho Kessem irrigation dam projects, as well as the Jimma University Teaching & Referral Hospital have taken time beyond original schedule and budgets, according to the report. These were half of the 16 government financed projects found to be failing to meet budget both in time and cost, Construction Sector Transparency Initiative (CoST) Ethiopia said.

CoST is a global initiative started in South Africa and the United Kingdom in October 2012, with the support of the World Bank. Ethiopia is one of the five African countries covered In the Initiative. Guatemala, the Philippines, and Vietnam are the other countries where CoST looks at major roads, water and building projects and their procuring entities as well as the way in which procurements are carried out.

“The aim of these surveys is to guarantee that government entities engaged in the construction of large projects have a transparent procuring system,” said Eyasu Yemer, country manager at CoST Ethiopia.

Close to 25 projects in Ethiopia – from roads to education, water and health sectors – were under the watchful eyes of CoST during its pilot phase five years ago before the official launch in 2012. It found at the time that “the feasibility and design stage as well as bid evaluation process and contract implementations,” are found to be a major cause of concern, according to CoST.

Its latest report was a result of its second scrutiny on Ethiopia, focusing on 16 projects. The findings were tabled two weeks ago to officials from the Federal Ethics & Anti-Corruption Commission (FEACC) and the construction as well as procurement agencies at the Elilly Hotel, on Guinea Conakry Street, near the United Nations compound in Kazanchis area.

The second phase of Adiremet-Dejena-Dansha project, a 97Km road construction in northwestern regions of Tigray Regional State, was reckoned to be finalised in February 2012. It was only three fourth of the projects that came to finalisation this month. The price of time lag on this has cost the federal roads authority an additional 274 million Br from the originally projected cost. Lack of transparency and prolonged procurement, design modification as well as limited capacity of the contractor, are attributed as major problems, according to the report.

Contracted out to the Chinese Hunan Huanda Road & Bridge Corporation (HHRBC), this road will connect, upon completion, areas in the Tigray Regional State to the Gondar-Humera road at Dansha Town.

Another project, a 72Km road from Mehal Meda to Alem Ketema, undertaken by Sunshine Construction Plc, remains under construction, although its deadline passed in September 2014, after three years of work. With a budget of 802 million Br, the project was only 30pc completed during site inspection by COST-Ethiopia in June 2014.

The delay was caused due to change in the first design, which took a year and a half, according to Samuel Tafesse, chairman of Sunshine Construction. Nonetheless, completion is now expected in February 2016, he told Fortune.

The construction of Ribb Irrigation Dam in South Gonder, in the Amhara Regional State, was projected to cost 1.3 billion Br upon completion two years ago. A redesign work carried out in October 2007 led to price escalation that nearly doubled the cost, which the Ministry of Water, Energy & Irrigation (MoWEI) hopes would develop 20,000ha of farm land. The project was 62pc complete in June 2014.

“We understand that there is a delay in the time of completion on these specific projects and a cost overrun,” said Bezuneh Tolcha, communication director at the Ministry. “This came about because of machinery and human resource shortages with the contractors.

The contractors are the state owned Water Works Design & Supervision Enterprise (WWDSE) and Water Works Construction Enterprise (WWCE).

Atakilt Teka, chief executive officer of WWCE, blames outdated cost valuation conducted in 2005.

“This in return made us short in finance, of which machinery could neither be bought nor rented,” Atakilt told Fortune. “There was also a shortage of inputs such as cement; we are running the project at a Negative cost.”

The response from the federal agencies responsible for these projects is quite cautious.

“We are yet to find out the details of the findings,” Samson Wendimu, communications manager of the Ethiopian Roads Authority (ERA), told Fortune. “We have already begun working with CoST-Ethiopia. We welcome their recommendations though.”


Published on October 26, 2014 [ Vol 15 ,No 756]



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