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 Furthermore, the aging machinery within the industry poses another challenge, as many machines are outdated and hinder project execution.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