Better deal for relocated riverside residents
A new study is being conducted on compensation for people living alongside Addis Ababa’s rivers.
The new plan, which would have to be approved by Takele Uma, Vice Mayor of Addis Ababa is expected to pay better compensation to people who live within a 50 meter radius of a nearby river and are forced to relocate. The current compensation system pays a minimum of 550,000 birr for private house owners.
The new plan will only pay money to people who own a private house near the river while the people who live in government house will be relocated to a condo or Keble home.
Sources in the city administration told Capital that the new plan will be applied until the end of this fiscal year.
“Many people live near the rivers and we want to remove them quickly so, assuming the Mayor approves we will revise our compensation plan.’’
Recently the River Basins & Green Areas Agency made a plan to control waste that enters the rivers, and storm runoffs that cause flooding, and the creation of conducive institutional environments for conservation.
A recent study made by the agency disclosed that 900,000 different government and private institutions are vulnerable to flood disaster.
The identified 1, 435 places are at high risk and if action is not taken thousands could be killed and 4.2 billion birr worth of property damage could occur. Among the riskiest places 66 are located near the river and 26 are located near a potential landslide area. Most of the risky places are found in Gullele and NifasSilke Sub city.
Riversides in Addis Ababa have been a source of worry for residents along their precipices. The areas have been dogged by landslides, pollution and lack of development for ages. But due to a spate of development activities, that might change soon.
The research found that Addis Ababa Rivers and riversides face problems which include: badly polluted segments through direct discharge of domestic waste generated mainly from households and institutions; river bank erosion; and inaccessible rivers and riversides.
Corruption’s shame in Real Estate
Addis Ababa has been undergoing a facelift as luxury apartments have mushroomed alongside, office buildings and villas. Its urban areas have also expanded to include the former rural areas surrounding it. Real estate development has dramatically changed the city, giving it a modern look and feel. However, the continuous housing demand and scarcity of land has created corrupt practices such as grabbing land for many years with unfinished or no construction.
The new administration of the Addis Ababa region has taken action recently to address the land grab and corrupt practices which to me plausible and long overdue. This action will set the standard. In a similar note, the council need to also consider and revise standards and operating procedures to issue construction permits, tender processes etc that is currently the bottleneck that hinders completion of projects that actually gave the city a nickname “the ever constructing city” where building construction never ends. One asks, how long it took to finish Midroc Ethiopia main office (where resources is not a problem), why are some real estate projects still not finished for over 10 years. Such questions should be on the burden of the city council to further look into.
It is a known truth within Real Estate Developers that many are guilty of malpractice and playing foul over the construction development life cycle is an ubiquitous phenomena for most if not least.
From the outset, tenders are hijacked. This is particularly a known practice for large scale construction. A group of contractors /bidders gang up and decide what to put as an offer in each bid and know who will be the winning bidder. This will do two things. One, as all are bidding anyways, it will allow them to act as if they are competing with the outside world but in essence it is an orchestrated action. Secondly, the winner bidder will have a jacked up price but is the lower than it’s setup counterparts. The winning contractor pays the rest some amount, which is known as RENT, (mostly added to the project bid proposal, inflated price) and everyone is happy except the project itself. By the way, this could also be used for any tender including purchase of raw materials, food items etc.
The other corruption method is delaying the project itself. Particularly of interest to me is housing as housing market prices keeps skyrocketing. Delay in completing a project is definitely costly and today, it is does not burden the developer but the public. The developer will take this chance to request more money from the poor public or ask to forfeit the house etc. The scandal with Access Real Estate still lives in the public knowledge. The city council needs to have a mitigation plan so that it never allows such schemes to happen again.
Another delay strategy which is ongoing and has dealt a major blow especially to the Diaspora community has been going on with the Country Club Developer known as CCD. There is a scam going on that each region of the country must solve. I know a very close friend of mine (Diaspora) suffering from continuous requests for additional money to complete a project for which an agreement was signed more than 10 years ago. As of this write up, the construction has not been completed but additional funding had been continuously asked for by CCD. Sadly, the negligence of the city audit has allowed the contractor to continue to build phase 9 and so forth while phase 2 properties are hanging within the construction compound held hostage for additional funding exceeding the original signed and agreed upon contract. Construction never commences once money is received as CCD knows that clients are remote. Only small amount of work immediately starts when client shows up at CCD office. It seems to me that CCD systemically wants these clients to sell back at the original agreed project price to CCD as today’s price exponentially inflated and CCD is in its 9th or 10th phases of construction. Confusing to the public is why a developer holds property plan by it’s name for properties that have been funded by 50% or more. Can the city council help alleviate this corrupt practices by retroactively following up case by case and refund funds to public possibly with penalty.
I was honestly taken off guard when I saw CCD’s owner, in Shashmene with the Prime Minister on a visit to an agro industrial area. Curious minds would ask how such a developer could be given as big a project as this while not diligently and most of all professionally completing previous commitments.
I believe the elected officials must address the real estate scandal with utmost priority. The development of a city plan does on end with issuing a tender or leasing a plot of land. The City must protect the public’s interest from start to finish. In most developed countries there are penalties attached to delayed projects. Major excuses are seen to lie around scarcity or escalation of raw material prices which sometimes is a valid reason but must be verified. No builder must hold the plan hostage for a delayed house and other projects where more than a certain amount of payment is made for the property. Last but not least, the City must include as criterion for issuing or renewing developers’ licenses based on merits that addresses professionalism, past construction excellence, not by how many trucks one owns. This of course enforces standards as it calls for downgrading or upgrading and revoking of construction licenses.
By Getahun Alemu
Enat Bank’s paid up capital nears NBE standard
Enat Bank, which is one of the late comers to the financial industry, has exceeded expectations during the previous fiscal year.
The bank’s annual report which came out recently showed the bank earned high profits and approached the paid up standard for the banking sector.
During the 2017/18 financial year the bank earned 750 million birr in total income which is an increase of 230 million birr compared with the 2016/17 financial year. The total amount of income has surpassed the target the bank set for the year. According to the report of Enat Bank, their goal was to generate 736 million birr in the 2017/18 fiscal year. However, the achievement went up 2 percent compared with the target.
For the stated period the bank earned a gross profit of 216.5 million birr before tax, which is an increase of around 50 percent. A year ago the gross profit before tax was 146.5 million birr. According Enat’s external audit report they have secured 159 million birr in gross profits after tax. During the 2016/17 fiscal year that amount was 112 million birr.
Their after tax earnings per share also increased 18.4 percent compared with 16.8 percent a year ago.
The bank’s deposit mobilization was a third of what it was a year ago. The report indicated that the bank’s deposit reached 4.9 billion birr which is a 33 percent increase. At the same time the number of depositors rose to over 70,000.
The bank disbursed 3.3 billion birr, which is 10 percent higher than the target, in loans and advances, according to the report. The bank had a goal for outstanding loans and advances of 3.1 billion birr. From the total of loan shares constructions and exports took the majority at 18.6 and 19.6 percentage respectively.
Enat’s paid up capital has now reached almost one billion birr. This is an 8 percent increase over the targets set for the year. The bank’s goal was for paid up capital to be 902 million birr, while the actual achievement was 971 million. The National Bank of Ethiopia, wants all banks to have one billion birr in paid up capital. The bank’s total assets were of 6.5 billion birr as of June 30, 2018 as compared to 4.9 billion birr a year ago.
