The Ministry of Finance & Economic Development (MoFED) has allocated a budget for only ongoing road projects, despite the Ministry of Transport’s (MoTr) planning to construct 110,000Km roads for GTP II.
Sufian Ahmed, the long-standing minister of Finance & Economic Development was defending the budget in Parliament on July 6, 2015. The Members of Parliament focused on road projects that are not included in the budget but promised by MPs for their constituents and those projects that were lagging behind schedule, as well as projects that have not yet started, although their preparation was complete. Some MPs were also asking for the construction of new roads in their constituencies.
Roads connecting Kibre Mengest and Shakeso; Bule Hora and Yirga Chefe as well as Bure and Nekemet were part of the discussion.
The 250Km road which connects Bure with Nekemet, has already secured 6.5 billion Br from the World Bank. However, due to the procurement process, the road is still not launched.
“The procurement process is the factor behind the lag, which is cumbersome,” said one senior official at ERA, on condition of anonymity.
“Some financiers also demand design reviews,” said another official at ERA.
After the authority passes through all the procurement processes and finally identifies the awardees, the document will be sent to the World Bank, which will evaluate every step of the process before finally approving it, said the official.
The 19Km asphalt road connecting Kibre Mengset with Shakiso, started only in 2012, but so far only 10.9Km have been completed, reads the 12 month performance report of ERA for the 2014/15 fiscal year. The road, which was supposed to be finalised in 2014, was contracted to Flintstone Engineering and consulted by Yididya Engineering.
Right of way issues and poor performance of the contractor were taken as factors behind the lag, reads the report.
There are a number of reasons that projects lag behind schedules, said another senior official who chose to remain anonymous.
One will be during the pre-contract period which is caused by slow access to finance and time taken by financers to approve and release the money. During the procurement period especially for projects donated by financers, it takes a time to get into the actual process, noted the senior official.
After any specific bidder gets a contract, the whole document has to be sent to the respective donors for evaluation based on their procurement procedures. And then the donors may cancel the award or request the revision of the design.
Once the projects start, design and right of way issues are major factors for time overrun.
There are 22 roads facing either time overrun or poor performance; ERA cites machinery problems, implementation gaps on the side of contractors, resource mobilisation problems, financial shortages and human resource shortages as causes of time overruns.
ERA has terminated a road contract from Mazoria to Hadro, taking the project away from a contractor called Nasew and the consultant Beza, and awarding the job to the Ethiopian Roads Construction Corporation. This 38Km road was supposed to be finalised on October 6, 2014. But the contractor had managed only 23Km.
The new budget year, which just started, will give only 24 billion Br to ERA from the treasury, although it had requested for 30 billion Br. It is expected to get an additional nine billion Birr in loans and 177 million Br in aid. If ERA had been allocated the budget it requested, it intended to use the 24 billion Br for ongoing projects and six billion Birr for new projects.
The fiscal year budget allocation has covered 174 road projects. Of the requested budget six billion Birr was allocated to new projects.
The reason that ongoing projects were prioritised is that the revenue the country expected to collect did not allow for increased budget allocations for new projects, stated Abraham Tekeste (PhD), the state minister at MoFED.
According to a report by Sufian, the country’s GDP is expected to reach to 1.75 trillion Br.
For the coming fiscal year (2016/17) new projects will have the chance to have their budget share as the ongoing will be completed this year, said Abraham. The demand is high. Regarding the performance of road projects, the ministry has been working in assessing and monitoring the projects by consulting with those who undertake the road projects.
So far the ERA has terminated two projects, Debre Birhan–Ankober and Ankober- Dulacaha, putting them up for a new bidding.
In most case it is contractors who are made accountable for their projects’ delay but the consultants should also take the responsibility, said the official from ERA. They should have a full stake in the implementation of the projects, he added. Terminating the contracts and reissuing the tenders could be an option, according to this official, although as Abraham stressed in his presentation to Parliament, close follow-up of projects and not contract terminations would be better.
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