Metals & Engineering Corporation (MetEC), the state-owned military-industrial conglomerate, is changing its name to National Industrial Engineering Corporation, and narrowing down its activities to the manufacturing of industrial products only.
A bill to re-establish the corporation has been working its way through MetEC management and approval by its board in the past two months. The bill was sent last week to the Council of Ministers for approval.
The new corporation’s mandates will be restricted to manufacturing commercial products such as tractors, trucks, buses, television sets, solar items, energy meters, turbines, construction machinery and engines.
Another bill to form the Defense Industry Sector, a wing to be established by splitting MetEC in two, is being drafted by the Ministry of Defense and has been submitted to the Council for approval. Defense Industry Sector will be tasked with manufacturing military vehicles and armaments.
The idea to split MetEC follows an order by Prime Minister Abiy Ahmed (PhD) three months ago. The Prime Minister had expressed his frustration over the performance of the company.
“Though the corporation was established with a positive objective of changing the country, the approach has many problems,” said Abiy last August.
The corporation’s 10 sugar projects, Yayu, a Multi-Complex Industries Project, and the Great Ethiopian Renaissance Dam are some key mega projects that have been awarded to the corporation in years past. However, the projects were stalled and delayed falling behind their scheduled time frames. The projects were removed from the corporation over the past 18 months and awarded to other companies.
“The name change is aimed at reinstating the trust of the company and to start afresh,” said Abdulaziz Mohammed, vice director of MetEC.
The corporation was initially mandated with building the technological capabilities of the country’s defense forces and manufacturing industries.
“The restructuring will be followed by a thorough reform,” said Abdulaziz.
Out of 15 industries operating under MetEC, four including Homicho Ammunition Engineering Complex, Gafat Armament Engineering Complex, Dejen Aviation Engineering Industry and Special Armament Industries, will be transferred to the Defense Industry Sector, according to the draft regulation.
“The fate of Bishoftu Automotive Industries has not been identified yet,” Abdulaziz told Fortune.
Bishoftu Automotive Industries, a manufacturing plant located in Debre Zeit, produces both commercial and military vehicles.
The restructuring will also shift the accountability of the corporation to the Ministry of Public Enterprises from the Office of the Prime Minister. The new Defense Industry Sector, which will be tasked with manufacturing armoured vehicles, assault vehicles, ambulances, command and surveillance vehicles, bullets and military utility aircraft, will be reporting to the Ministry of Defense.
To facilitate the split process, eight subcommittees were formed along with the main committee composed of members of the Corporation, the National Defense Forces and the Ministry of Defense. The main committee is chaired by Minister of Defense Motuma Meqassa with Berhanu Jula (Gen.), operations chief of the Ethiopian National Defense Force, and Molla Hailemariam (Lt. Gen), chief of the Army Logistics Department, as members.
Early last week the employees were informed about the split with a letter signed by Sisay Zaid (Maj.), head of the office of the director general of the corporation. The letter stated that the corporation would work on the salaries of the employees and resource allocation, according to sources close to the case.
Established eight years ago by an initiative of the late Prime Minister, Meles Zenawi, MetEC was envisioned to be one of the major tools for industrialisation and transformation of Ethiopia into a middle-income country. It was established with 10 billion Br in capital and incorporated 15 military and civilian companies.
Last April, the founding CEO of MetEC, Kinfe Dagnew (Maj. Gen.) resigned from office and Bekele Bulado (PhD), former minister of Trade, replaced him. MetEC has over 19,500 employees, both members of the military and civilians, working at 98 subsidiary companies.
MetEC laid off contract employees following the termination of its contract at several mega projects. One of the subsidiary companies, which operates with 3,000 employees, Ethiopia Power Engineering Industry, gave a one-month forced leave of absence to half of its employees to cut administrative costs.
Military members, who work in the manufacturing of commercial products will be given the choice of either staying in the corporation or being transferred to the Ministry of Defense and vice-versa, according to Abdulaziz.
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