Wednesday, September 16, 2026

ERA projects stall amid rising costs, inflation pressures on contractors

By Eyasu Zekarias

The Ethiopian Roads Authority (ERA) has reported significant challenges in the completion of road projects due to rising costs affecting contractors. Inflation has exacerbated delays and hindered overall project performance, making it increasingly difficult for contractors to secure necessary financing.

During a review by the Standing Committee on Urban Infrastructure and Transport of the House of People’s Representatives, concerns were raised regarding the low performance standards in major road works, including procurement and maintenance. Melka Bekele, Deputy Director General of ERA’s Construction Project Management, attributed these issues to increased resource requirements driven by inflation.

ERA highlighted that road projects typically require substantial fuel resources, averaging four fuel tanks per contractor, costing around 4.5 million birr each. To adequately finance fuel needs, contractors require between 18 to 20 million birr monthly. Without sufficient funding for fuel, project performance suffers significantly.

Despite improvements in cement supply, Melka noted that price discrepancies between factory and market rates complicate procurement efforts. Furthermore, the aging machinery within the industry poses another challenge, as many machines are outdated and hinder project execution. The high rental and purchase costs of machinery have created gaps in contractor capabilities.

Security concerns have also impacted project implementation, with 27 projects currently stalled. The ongoing conflict in various regions has led to delays and heightened risks for contractors operating in those areas.

Hot this week

Production up, but the ‘cost’ variable weighs heavily

Production is up in 2021 for the Italian agricultural...

Luminos Fund’s catch-up education programs in Ethiopia recognized

The Luminos Fund has been named a top 10...

Well-planned cities essential for a resilient future in Africa concludes the World Urban Forum

The World Urban Forum (WUF) concluded today with a...

Private sector deemed key to unlocking AfCFTA potential

The private sector’s role is vital to fully unlock...

Ethiopia, Kenya finalize preparations to scale up cross-border power trade by December 2026

Ethiopia is finalizing preparations to double its electricity supply...

Ethiopia records 824% remittance growth over the decade, accounting for 5% of national GDP

Ethiopia has rapidly ascended to become Africa’s fourth-largest remittance...

Ethiopia Rejects Commercial Buyback Offer for Looted 18th-Century Royal Gospel

The Ethiopian Heritage Authority has confirmed to Capital that...

Djibouti positions itself as Horn of Africa logistics gateway with new WFP base handover

The Government of Djibouti has officially assumed full management...

Dangote Refinery launches historic $1.6B IPO

The Nigerian Exchange (NGX) officially launched the initial public...

IOM warns Sudan humanitarian system faces collapse within weeks without new funding

The International Organization for Migration (IOM) has issued an...

Safaricom surpasses 15 million subscribers as it marks five years

Safaricom is marking five years since it received a...

Africa’s economic momentum is building as savings and cross-border trade activity accelerate

Rising savings, increasing cross-border payment activity and growing participation...
spot_img

Related Articles

Popular Categories

spot_imgspot_img