The Metals and Engineering Corporation (MetEC), who is undertaking the electromechanical installation work of the Grand Ethiopian Renaissance Dam (GERD), is going to outsource it to a Chinese giant company, on the first unites of the project, Capital has learnt. The outsourcing puts hope to accomplishing the project early.
The project that commenced seven years ago and at the initial plan was expected to be accomplished by 2017 has been delayed; despite several design changes and increasing the production capacity to 6,450 MW was undertaken.
The project is run by the Italian construction firm of Salini Impregilo and MetEC as the two main contractors and a Franco-Italian joint venture of Coyne et Bellier and ELC Electroconsult retained the consultancy service.
The civil work managed by Salini is in good progress. The electromechanical installation was expected to be done by MetEC itself, while equipment supplied by prominent global manufacturers. Now it transferred it partly due to the poor progress.
On his press conference held on Thursday July 26 Seleshi Bekele (PhD), Minister of Water, Irrigation and Electricity (MoWIE), about the sudden death of the prominent project manager Semegnew Bekele (Eng.), admitted that the delay occurred on the electromechanical part of the project, which is handled by MetEC.
He said “the civil work is in good hands.” “Stakeholders including MoWIE, contractors, consultants, Ethiopian Electric Power, project leaders and board are working strongly to accelerate the project,” he added. The project manager of GERD Semegnew was here to attend meetings as of Monday, according to Seleshi.
According to the information that Capital obtained, there was a bid to outsource the installation work, the project with the local currency payment. Sources said that the company has already commenced its work at the site a couple of weeks ago.
The company may carry out the penstock, Bottom outlet, steel structure and other relevant projects on the electromechanical part, which may allow the project to generate the first power from the two turbines.
According to sources, who are close to the case, MetEC did not plan to outsource the installation of electromechanical work, while the pressure on it forced to award for other companies in an international bid.
Even though MetEC did not assign another company for installation until recently, it awarded several supplies and design works for prominent companies on the electromechanical part of the project.
For instance it has subcontracted turbine construction to France’s Alstom and Germany’s Voith and other Chinese company were assigned for the supply and design of high voltage equipment.
Most of the design and supply of the electromechanical work at GERD has been outsourced for international firms.
As of the latest information the first two units of GERD may start production by 2020 according to the rescheduled plan. Experts on the sector stated that the involvement of well-known companies would allow the project at least to start production within few period.
The Minister has also stated that there were several meeting about the project with several stakeholders.
GERD that is reported accomplished more than 60 percent is expected to consume over USD 4 billion.
Technology should get proper attention to achieve GTPII
On the evaluation of the second Growth and Transformation Plan (GTP II) top government officials insisted the technology sector should get proper attention for the expected economic growth. The officials expressed their frustration on the expected achievement of the GTP. They have also stressed about reality of growth figures stated by the government.
Those who claimed that the country has to give attention for technology development claimed that the IT development has to be managed properly. “The country has to work on the production of technological products,” a participant who attended the event stated.
A representative from Ministry of Science and Technology said that the country imports USD 2.73 billion of industrial machinery and computers, USD 1.4 billion of vehicle and related equipments and electrical machinery import worth USD 1.3 billion that indicates that Ethiopia have to do strongly on value addition and technological productions. “Otherwise it would be difficult to fill the trade balance,” he said.
It has been presented by a representative of National Planning Commission that the GDP share in the 2016/17 budget year that the agriculture, service and industry sector has 36.3, 39.3 and 25.6 percents respectively.
25.6 percent of industry sector share of the GDP has also included construction and mining sector, which indicated that the manufacturing sector is minimal.
It has been reported that the manufacturing industry share is 6.4 percent that may include the mining sector, while the construction sector is 18.2 percent at the 2016/17 year.
“It is misleading that the industry sector is going to take over the economy since the manufacturing industry is not showing a sign of growing,” a participant said.
The leather and textile sector did not succeed as expected, according to the participants. They even claimed that it failed.
According to the document presented on the discussion, the actual achievement of the manufacturing industry is 27 percent in terms of export earnings in the 2016/17 budget year.
The plan was to earn over USD 1.3 billion, while the revenue earned in the stated period was USD 360 million, which was USD 377 million in the 2014/15 budget year. Potential manufacturing sub sectors textile and leather sector registered growth of 33 and 41.8 percents respectively.
According to the initial plan at the end of the GTP period in 2020 the export earnings have to reach USD 3.55 billion, which is almost tenfold of the revenue in 2016/17.
A participant says it is impossible to narrow the trade deficit by exporting primary goods. “We need to work on import substitution at least on some basic commodities like wheat, sugar and edible oil,” they added.
Participants also stressed their concern on the credibility of the figures given by the government. Some of the participants said that the GTP II would not be attainable as GTP I, which the government claimed that it achieved the first five year plan.
Participants recommended that revising the institutional capacity of government organs that are working for the implementation of the GTP. They reminded the projects that was commenced in the first GTP but never finalized until now.
One of the participants stated that he could not believe that banks follow the policy of the government in terms of loan provision. He reminded the loan provision that gave for rain feeding agricultural projects at Gambella region, while almost all of them failed.
“It has to be seriously revised, the monitory policy management in relation with the macro economy policy of the country,” he added.
Yinager Dessie (PhD), Governor of National Bank of Ethiopia, told Capital that study is under way to see challenges on the policy management.
Charges dropped against CCECC
The Attorney General’s office has dropped the criminal investigation into tax evasion and forgery allegations against Chinese multinational company CCECC and its manager. ERCA had accused the company of forging receipts and evading taxes.
In a letter written to the company, the Federal Police, ERCA and the prosecution department of the Office the Attorney General, Brhanu Tesgaye, said the criminal investigation was dropped after an agreement was reached with stakeholders.
The Federal Police, ERCA and Attorney General discussed the issue and came to a joint conclusion to drop the charges based on the large amount of mega projects the company is conducting.
After the joint meeting ERCA wrote an official letter to the Attorney General saying the CCECC had paid the taxes the Authority requested.
The company paid 266 million birr in taxes after the appellate tribunal of the Authority deducted half of the amount from the initial decision 10 months ago. That amount would have been 446.4 million birr.
The company was accused by the ERCA of evading 266 million birr in VAT, 14.5 million birr in share profit tax and 165 million birr in profit tax.
Brhanu rationalized his decision by saying they were taking a less draconian approach to conducting justice. The Attorney General Establishment Proclamation gives the Attorney General power to order a criminal suit in the interest of the larger public.
“We will lessen tax and corruption cases if the suspects are willing to return the government’s money,” he said. “I believe the release of both tax and corruption suspects is appropriate if they are willing to return the money taken,” he told Capital.
The CCECC is involved in many huge projects including industrial park development.
The China Civil Engineering Construction Corporation (CCECC) is a state owned construction and engineering company which is known for developing industrial parks. The company constructed the Hawassa industrial park with USD 246 million and the , Kombolicha and Meqelle parks and the ongoing Bahir Dar industrial park.
