City Repossesses Unimproved Land Leases, Controversies Flare

The city administration seized 154 separate plots of undeveloped land from investors, diplomatic missions and government institutions. The city administration's decision has created disappointments among investors who claim that the action is unreasonable, while the city administration stands by its decision and considers it lawful under the proclamation. Experts applaud the decision and its merits, but the matter may be more complicated than it sounds, WRITES BEHAILU AYELE, FORTUNE STAFF WRITER.

Abinnet Gebremeskel, CEO of MIDROC Ethiopia’s Project Management Office, found out about the repossession of land by the City Administration from the news. The only project that they were notified about was MIDROC’s Bole Towers.

“I’m really saddened by the way the city administration treated us,” he said.

MIDROC has been engaged in 11 projects, including the twin towers and the expansion of the Sheraton Addis Hotel in the city. The city has removed 55ht of land from the company’s control, around 13pc of the overall repossession claimed by the city.

MIDROC is not the only one affected by the city government’s new effort.

The City Administration has repossessed land leased or granted to 95 enterprises, 18 diplomatic missions and 19 government offices. The city also repossessed 11 under developed land. It totals 1.3 million square meters of leased land and another 2.7 million square meters transferred during different regimes or before the leasehold system came into effect.

The administration has also reclaimed 20ht of land leased to the African Union for development of an African cultural centre.

“We revoked the lease agreements based on the proclamation,” said Beyene Lambiso, the city’s Land Lease Monitoring Office head.

Firms that had leased the lands, such as MIDROC, claim that there is a valid reason why the lands remained undeveloped. The structural design of MIDROC’s twin towers project in Piassa, across the street from City Hall, for instance, had multiple revisions, according to the company.

Initially, the towers were designed as a twin 39-49 story structure but was redesigned as a single 25-storey building, which was altered to a 4-storey building in 2015. The initial budget for the twin towers was estimated to be 400 million Br.

“The changes were made at the request of the city administration, which pointed out that the buildings should go with the aesthetic of the area,” Abinnet told Fortune.

Following the revision, MIDROC signed a new contract with the City Administration in May 2016. In the agreement, it was stipulated that MIDROC had to finish construction within two years.

“We have been in construction for a year now,” Abinnet said. “Yet there were challenges that we faced when we started the construction.”

Excavation and foundation work proved harder to carry out than the contractors expected as the land surface was too hard, and the company claims that it has 150 employees still working at the twin towers projects.

“The drilling with hammering machines couldn’t solve the problem,” Abinnet told Fortune. “The company requested the use of blasts, but that was not possible as there are old buildings around,” according to Abinnet.

As for the expansion of the Sheraton Hotel, the company did not get the title deed to start the development, which MIDROC claims to have paid around 220 million Br in land lease fees and compensation.

“Title deeds are not within our jurisdiction,” said Tesfaye Tilahun, head of the Land Bank & Transfer Office. “But we have been afforded the right to reclaim land left undeveloped beyond a certain period of time.”

The city’s decision to repossess the land came after the result of a land audit that took over two months to conduct on sites that the administration believes have was developed in time.

“Our decision is based on the records and previous actions undertaken on these projects,” said Tesfaye.

The recent land audit was done on public houses, condominium housing projects and leased land.

Following the audit, a total of  412.6ht of land have been returned to the Addis Abeba Land Bank & Transfer Office, according to city officials.

Lack of organised and clear information about the owners of the plots and which pieces of land have been left idle and for how many years were some of the challenges faced during the audit and assessment, according to Takele Uma, the city’s deputy mayor, who first announced the repossession of the land to the media two weeks ago.

“This is just the start,” said Tesfaye. “We will go after other properties across the city once we settle our current assignments.”

This initiative by the city has won favours from residents of Addis Abeba as well as participants of a site tour orgamised by the city administration to the repossessed properties last Monday.

“If land could be physically moved, the city would have been empty by now,” said Daniel Kibret, renowned writer and member of the National Tourism Board who participated in the tour.

Yet other visitors to the sites believe that the matter should be handled with care as they believe they only heard the viewpoint of one side.

The visitors also questioned the effect that repossession of land once leased to diplomatic missions may have on the nation’s image.

“I don’t believe there will be any repercussion on our country’s image,” said Takele. “We repossessed land that remained idle for over a decade.”

Before the tour wrapped up, Takele told the gathering that the repossessed land will be leased out to serve the public good.

“We will tender the land for new projects and investments according to the proclamation,” said Beyene.

Experts view the measures with optimism but suggest a proper investment plan should be drawn up before the land is transferred to new investors.

“As urban land is a scarce resource, the administration’s decision to recapture undeveloped land is right,” said Tegegn Gebreegziabher (Prof.), who has over two decades of experience in regional and local development.

He also suggested finding out what the public wants and reassessing the city’s master plan before initiating other projects.

“The administration should review the land resource usage policy of the city,” argued Tegegn. “Urban land should also be accommodating to the poor so the city can address the problem of illegal settlements.”

Legal experts say that while repossessing the land can have a policy goal, investors may ask for compensation for any improvement they have already made on the land.

“The administration will cite legal frameworks and question the investors about the delay,” Ephrem Berhanu, a legal expert specialising in construction and investment.

“Yet, the lessees to the land could request compensation for the investments they made,” Ephrem said.

The management of MIDROC though plans to take the case to the Mayor’s Office, according to Abinnet.

“I hope we will be served justly for the land that was repossessed from us,” Abinnet said.


Published on Oct 06,2018 [ Vol 19 ,No 962]



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