Thursday, April 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 Furthermore, the aging machinery within the industry poses another challenge, as many machines are outdated and hinder project execution.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...

Renowned artist and educator Behailu Bezabih passes at 66

Ethiopia’s art community is mourning the loss of Behailu...

Black Sea imports outpace local supply as Ethiopia battles tight grain markets

Ethiopia’s agricultural sector is navigating a complex paradox of...

Afri Fund Capital eyes $6 billion raise for Lapsset project

Nairobi -based Afri Fund Capital has announced an ambitious...

Sudan and Ethiopia agree to boost air connectivity

Sudan and Ethiopia have moved to renew civil aviation...

AI is fuelling the ‘Digital Colonisation’ of Africa, warns UN Scientist

The United Nations has launched its first global panel...

Parliament approves law allowing companies, NGOs to provide farm services

The House of Peoples’ Representatives has cleared a law...

Ringleader of suspected human trafficking network arrested in Ethiopia

Police have arrested a man accused of being at...

37 mln voters registered for Ethiopia’s upcoming general election

The National Election Board of Ethiopia (NEBE) has announced...
spot_img

Related Articles

Popular Categories

spot_imgspot_img