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The Ethiopian Road Construction Corporation (ERCC) launched a new business plan which aims to increase the government’s market share in road construction to 50 percent by the end of the next five years of the GTP II.
The plan also stipulates to increase the government’s role in road maintenance from its current share of nearly 55 percent to 70 percent.
Currently, the corporation is participating in 13 federal road construction projects while local and foreign private contractors are working on 54 projects. ERCC which constructed 704 km of roads in the past three years will look to lay down 1,600 km of roads in the second GTP period.
The corporation has also set its profit target at more than 3.2 billion birr, which will be earned from hiring out equipment, selling raw materials for construction, and from road construction and maintenance.
ERCC is also considering delving into markets in Somalia and South Sudan to meet its ambitious targets.
Corruption leading to abuse of limited resources, inadequate working capital, and lack of technical expertise in construction are the major challenges plaguing ERCC since its establishment in 2011.
ERCC had acquired a pack of 2,037 construction equipments, 91 percent of which had no book value, from the Ethiopian Roads Authority when it splits.
Yared Lemma, Head of ERCC’s Corporate Plan and Business Development Department, informed Capital that the new plan will allow international companies to work jointly with ERCC. “We will have many road, dam, and factory construction projects and we need to work with international companies to benefit from shared, knowledge, experience and technology.”
Stiff competition from local and international contractors, inability of ERCC to offer diversified services, soaring prices of raw construction materials like iron, lack of foreign currency , are some realities on the ground expected to pose a challenge to the new business plan.
“Our efficiency will improve through time; we are aware that we face several problems and we will do our best in the GTP II period to solve these problems,’’ Yared explained. With a workforce of over 13,000, determination to rule Ethiopia’s large domestic market for road construction and with potential markets in neighboring countries, ERCC has the opportunity to flourish in the coming GTP period