Three state-owned enterprises have been awarded five road projects at a total cost of 5.4 billion Br. This signifies a huge leap forward in one-time project awards.
A decade ago, a similar amount, 5.6 billion Br, was reported as being a record high for the Ethiopian Roads Authority’s (ERA) 172-road project construction, study and capacity building endeavors.
The five projects awarded on June 1, 2016, however, relate to only 374km of road – three for construction and becoming operational, and the others for management, maintenance and upgrading.
The total cost of the projects is fully covered out of the government’s pockets.
Such deals, with building and maintenance contracts, are the first of their kind. The usual template for road construction projects excludes protection, rehabilitation and administration.
This will relive the Authority of the cumbersome task of road management, which often suffers from inefficacy due to under capacity.
“This will also act as another way of ensuring quality,” an industry player said, welcoming the change. “Lower quality means more expense in the long term.”
The Defence Construction Enterprise and the Ethiopian Construction Works Corporation both won two projects each, while a new player in the sector, Amhara Roads Works Enterprise, was awarded the Fitche Goha Tsion project – the third phase of the Addis Abeba–Gohatsion road.
Except the Duletcha-Awash Arba road, which will be carried out by Ethiopian Construction, all are existing asphalt roads.
This 53km road is currently only gravel, not fit for transport and heavy trucks. It is an important road, however, providing an alternative route from central Amhara – Debrebrihan and Ankober, known for their fast industrialisation, can gain quick access to the port via this route. Due to the predominantly flat topography, the 13 million Br/km cost is not uncommon in the industry.
This is, however, a little below the average 14.7 million Br/km cost for the construction and management of the roads on 10-year contracts.
The highest cost, 22.7 million Br/km, for the 60km Adama-Awash project, parallels the record high awarded six years ago. At that time, it was awarded to Yencomad, a local construction firm, for the construction of a 33km road between Yegdanber and Gobensa, near the town of Modjo.
The next highest price, based on the same 10-year construction and management contracts, was for the Mekelle-Dangolate-Samre-Fnarwa road, which is five million Birr/km less than the Adama-Awash project.
The lowest for a similar contract is close to 10 million Br/km, for the Fitche-Gohatison road project, which Amhara Road Works Enterprise will construct and manage for the same period. Amhara Road Works Enterprise established in 2010 with an initial capital of half billion Br is headquartered at Bahir Dar,capital of Amhara region. It was establishment to construct, improve and maintain appropriate roads across the region.
This road will have a width of 19m in urban areas and 10m along its rural portion. The road lies in the vast agricultural area of the Oromia region, as well as running through small connecting towns, including Chancho and Muketuri.
The firm’s general manager, Mahatebe Adis, said that, although it is the first time to sign a road construction contract with the ERA, it will not be difficult for them to finalise on time, while meeting all quality standards.
“We are happy that we won this project,” he said. ” We used to construct gravel roads.”
The Ethiopian Construction Works Corporation(ECWC) will construct 113km of road for a total of 2.1 billion Br, extending from Adama to Awash and Duletcha to Awash Arba.ERCC is a new government development agency which was under Ethiopian Roads Authority. ECWC was established in 2011 to carry out mainly road, bridge construction, maintenance and enhancement works.
The Defense Construction Enterprise(DCE) won two projects in Tigray – the Meqelle-Adigudem-Wukro road and the Meqelle-Dangolate-Samre-Fnarwa road – with a total of 186km. The firm was established in 2010 by Council of Ministers Regulation NO 185/2010 as public enterprise at registered capital of 800,000,000 Br. It is a profitable organ that was established with the merger of Defence Construction, Engineering Enterprise and Kality construction and Construction Material Production Enterprise at the cost of 276.4 million birr to undertake governmental or large private civil construction projects. Currently the enterprise is undertaking several governmental projects including road and industries.
Araya Girmaye, the ERA’s director general, signed a deal with Wolday Berhe, general manager of the Defense Construction Enterprise; Habitamu Tegegn, the deputy general manager of Ethiopian Construction Works Corporation, and Mehatebe Adis, general manager of Amhara Roads Works, on the premises of the Authority, last week.
“We will finalise the project on time, as we did for the Meqelle-Abiadi road project last year,” said Wolday Berhe. “We have the skills and equipment to build roads that meet the quality standards of the Authority.”
The projects cut across four regions – Afar, Amhara, Tigray and Oromia. They particularly target improving the route to ports through Adama Awash – the biggest outlet. The roads are also expected to impact various sectors, mainly trade, as well as tourism activities to the northern historical routes of Axum and Lalibella, and the Rift Valley’s rich bird watching and site seeing spots.
Increased connectivity to various weredas along the channel is also targeted for the market accessibility of agricultural products, as well as to facilitate industrial zone infrastructure. [Addis Fortune]