The government has devised a new procedure to allow all upcoming mega projects to commence only after obtaining approvals from the National Planning Commission.
Planned project owners of government institutions have to submit feasibility studies to the Commission, which will approve the project after a review of its viability, according to the new procedure.
It intends to avoid cost overruns and delays, according to Eyob Tekaligne, Commissioner of the Commission.
Both cost overruns and time delays of mega projects including road, sugar, fertiliser as well as hydroelectric and irrigation dam projects that are the primary source of public discontent in the country.
More than 80pc of the construction projects in Ethiopia run over budget and experience delays, according to an article published by the International Research Journal of Engineering & Technology in March 2017, “A critical review of the causes of cost overruns in construction industries in developing countries”.
Lack of proper cost planning and monitoring during pre-and post-construction stages, improvements to standard drawings during the construction stage and design changes, inaccurate quantity take-off, fluctuations in the cost of building materials and lack of planning and coordination are the major causes cited in the journal for project delays.
The three sugar projects that were taken away from the Metal & Engineering Corporation (MetEC) are among the projects that are delayed for years. Omo Kuraz I, Tana Beles I and Tana Beles II are 94.42pc, 78.75pc and 25pc complete, respectively, six years after the commencement of the projects. They were supposed to be completed within 18 months.
The Great Ethiopian Renaissance Dam is another example. The four-billion-dollar dam was expected to be finalised within five years, yet eight years later it has progressed only to 66pc completion. Due to the delay, Salini Impregilo, the main contractor, has requested the government pay compensation.
There are also many irrigation dams that are under construction, costing billions of Birr but are not completed, delayed by more than a decade and costing the country continued expenses.
“We have been working on this since July,” Eyob told Fortune.
The government, which is restructuring its institutions and offices, is also considering the establishment of a new office that will be fully mandated with overseeing the construction of mega projects in the nation.
The Commission has to review the full spectrum of the projects, according to Tesfaye Yalew, country office manager of Construction Sector Transparency Initiative – Ethiopia (CoST – Ethiopia), a global initiative started in South Africa and the United Kingdom in October 2012, with the financial support of the World Bank.
“It has to review project proposals from procurement to disposal,” Tesfaye said. “This will circumvent both corruption and delay.”
For the current fiscal year, the country will have no new mega projects, according to Prime Minister Abiy Ahmed (PhD), speaking to parliament last July.
“We will be focusing on finalising what we have started,” he said.