Selassie Araya, who has chosen to reveal only the name he was baptised with, runs an upscale printing service on the bottom floor of a four-storey building, on Ethio-China Road. The building is unfinished, with wood scaffolding covering the outer structure, and the sound of hammers and chisels can be constantly heard.
Selassie says he was eager to rent the place even though it was not yet finished, since finding an office space on the ground floor with a display window is hard, in a vibrant business area.
Running a shop under a construction site is not without its challenges, although a regulatory restriction is not one of them.
Legally, there is nothing that prevents building owners from renting space under unfinished buildings.
Selassie is yet to enjoy the benefits that ground level display windows normally accord. The owner of the building had promised him that construction would be completed within 15 days of him moving in. It did not, and the scaffolding blocks still block the view into his store. Worse still, his car window was broken five months ago by materials that fell from the top floor, where construction work is taking place.
“It could easily have been me or a passerby that got hit instead of the car,” he told Fortune.
He threatened to sue the contractors, even though he does not wish to be evicted. He has now reached an agreement to pay 3,000 Br less on his rent; he pays 126 Br a square metre for his medium sized store. On occasion, Selassie has even seen the plastic covering, used to protect passersby from falling debris, lying on the ground.
Despite such scares, however, Selassie is not going to move. He even refused to give Fortune his legal name for fear of eviction.
Selassie is not the only person in town to take such risks. It has now become customary in Addis Abeba to see unfinished buildings with occupants on the bottom floor. It seems that Ethiopia is one of those rare countries that does not have any laws that prevent unfinished buildings from being occupied by tenants, according to Abebe Dinku, Professor of Civil Engineering, and chair of the Infrastructure Department at the Addis Abeba Faculty of Technology, who has more than 30 years experience in the construction sector.
In other countries, only maintenance and expansion works could be undertaken while tenants are using the building, Abebe told Fortune.
“Poor health and safety measures, prevalent in construction sites across Ethiopia, could put businesses that rent space in unfinished buildings, and their customers, at great peril,” he added.
A 2011 research, commissioned by the Addis Abeba City Administration Labour & Social Affairs Bureau, found construction working environments in Addis Abeba to be very poor. Accidents like falls and injuries, falling objects and the collapse of scaffolding, were widespread occurrences at construction sites, the study, conducted by Afework Sisay (Eng), found.
For builders there is little incentive to take precautions. It is not only that the law has simply overlooked it, but also because such precautions do not factor into the technical evaluations during construction tenders. Financing constraints are given as the most common excuse for construction workers not being mindful about the hazards, although the cost for safety measures amounts to only 0.05pc of the total construction cost, according to Abebe.
The need to secure an ideal location for tenants still drives such practices in the capital. Banks and insurance companies expanding their branches, especially, are willing tenants of buildings under construction.
“Since we are limited to finding space in a specific area when expanding branches, we have to secure available spots as early as possible,” Gezahegn Bame, manager for the Wollo Sefer branch of Awash Bank, located under an unfinished 12-storey building on Ethio China Road, told Fortune.
Building owners, on the other hand, rent out places early to mitigate their financial shortages.
Getting financing from Banks for construction projects is difficult, according to a senior staff member at Kasma Engineering, the contractor company which owns the unfinished building where Awash has rented space. Additional income from rented spaces could be used to make loan payments to banks, he said.
Another building owner, on the same street, who claims to have been denied financing from banks, uses the rental fees as part of her working capital. She has rented out three floors of the six-storey building to shops, whilst finishing up construction on the fifth and sixth floors.
She has returned to Ethiopia to oversee the project, whilst her family, who live abroad, contribute to help finance the construction.
It is very hard to finish construction projects in time, according to her, because of price fluctuations for building materials and a shortage of daily labourers willing to work for affordable pay. Lack of financing from banks also exacerbates the problem and causes delays.
“The money we get from the rental fees, though meagre, sometimes helps us to buy construction materials and pay the day labourers,” she told Fortune.
Abebe also agrees that financing is an issue for building owners.
Previously most banks offered a package, whereby investors could put up 30pc of the total cost of construction and invest it to set up the foundation and erect columns, after which they would get a 70pc loan. Many have now been left out in the cold after banks started focusing more on financing industrial projects, according to Abebe.
Costs not only hinder building owners, but contractors as well, when it comes to taking appropriate measures to protect tenants when buildings are in progress.
Although, it is usually advisable to wait until the building is finished before renting out space, there are steps that could be taken to protect surrounding areas from hazards, even if construction is undergoing, says Abebe.
Using steel scaffolding, temporary platforms between the buildings and the scaffolding to shield people from falling items, as well as covering the entire construction area with a plastic net, are some of the precautions that could protect passersby and tenants of buildings under construction, recommends Abebe.
However, four unfinished buildings with tenants that Fortune visited on Thursday, March 14, 2013, have failed to take one or more of these precautions.
All of them use the wooden scaffolding instead of the recommended steel. Two of the four do not have a protective plastic cover, and three do not have platforms. These owners claimed that the structural work was completed, which, for them, means that there is a reduced chance of an accident.
However, finishing works done on the external facade of a building also warrant safety measures, according to Abebe.
Another of the sites Fortune visited is a 13-storey building next to Getu Commercial. The building is owned by shareholders of Omedad Plc and structural works are being undertaken by Bamacon Engineering Plc.
Although a branch of Bunna Bank rented space on the ground floor seven months ago, wooden scaffolding still covers the outside walls of the yet unfinished building, and it is without platforms or plastic coverings that can shield people and cars below from falling objects.
“It is up to the contractor to oversee the safety and construction of the building,” says Abate Bayu, managing director of Omedad. “So far accidents haven’t occurred on the site, and we haven’t received any complaints.”
On the other hand, Bamacon says that it finished its structural work nine months ago and that the current construction activity is being handled by 4G Aluminium and therefore the safety responsibility is theirs.
For their part, 4G Aluminium complained about costs.
“High costs make it difficult to ensure safety on construction sites,” Mesfin Berhanu, a partner at the company, told Fortune.
“In order to win projects, construction companies must offer the lowest price possible,” Mesfin said. “We would not be able to compete if we offered a higher price, by factoring in safety measures.”
Rental prices for steel scaffolding currently stand at 40 Br for one square metre, a month. For a building the size of the one Omedad is in it would take around 300sqm to 400sqm of scaffolding. This would cost 4G Aluminium 50,000 Br to 60,000 Br for the three months it would take to finish their work.
Even though 4G Aluminium was offered half of the going rate for scaffolding by Bamacon, it declined as costs would still be higher with the additional safety measures.
Regardless of costs, construction companies should not shy away from taking safety precautions, since accidents are a liability, which would add on more costs to companies, says Abebe.
The current procedure for tenders in Ethiopia declares bidders with the least price the winner, as long as they pass technical evaluations.
“Slashing prices at the cost of quality and safety would go unchecked in such a process,” Abebe told Fortune. “This should be adjusted so that the one with the least price and the most responsible offer wins, as was the case a few years back,” he said.
This means that the price offered could only vary by a few percentage points from the cost estimations of the consultant engineer, Abebe suggests. But, the ministry of Urban Development & Construction (MoUDC) adopted the public procurement and standard bidding directive from the Ministry of Finance & Economic Development (MoFED), which governs government purchases and tenders, and awards the bid to the one who makes the lowest offer.
Another solution would be to provide a legal framework that makes safety standards a requirement, according to Mesfin.
“Then construction companies would be compelled to add this into their cost when submitting offers, which would level the competition,” he told Fortune.
Though there are experts at the city, district and woreda level that conduct field supervisions of buildings under constructions, they mostly check whether the building is being constructed according to the design, rather than checking safety issues.
“If a building is by the road side, then we check to see if they have put up plastic nets, but we mostly focus on design procedures,” Andenet Beyene, construction supervision senior expert at the Addis Abeba City Administration Building & Design Permit Bureau, told Fortune.
The only restriction to tenants renting space in unsafe working environments comes in the form of a draft law that requires building owners to get occupancy permits before renting out space to tenants. Although it is not yet decided whether building owners can rent space on sites under construction, safety will be checked, according to Yemengest Asrat, newly appointed building occupancy permit senior expert.
Yemengest is waiting for the ratification of the directive to start his job, and conduct such supervisions. Until then, however, people like Selassie will be clamouring to rent space in unfinished structures, despite the risks.
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