Roads Authority, CRBC Addis Engineering Ink 224m Br Agreement
The Addis Abeba City Roads Authority (AACRA) has signed yet another contract with CRBC Addis Engineering Plc for the construction of the left side of the Megenagna Ring Road Roundabout – Ayat Village road.
The agreement on the more than 224 million Br worth construction of the road, which had been awarded to MIDROC Construction before it was snatched because of an alleged poor performance in previous projects, was signed last Thursday, May 14, 2009 at AACRA's head office. Fekade Haile (Eng.), and Wen Ying Zheng, general managers of AACRA and CRBC, respectively, signed the agreement.
The about 25m wide and the more than eight-kilometre long road, whose budget comes from the coffers of the city government, is expected to be completed in 14 months time.
CRBC Addis included, three construction firms had contended for the project following AACRA's tender announcement more than eight months ago.
Saba Tidhar Construction, a joint venture between an Israeli and an Ethiopian construction firm, offered to construct the road for more than 245 million Br, while Daniel Mammo Construction (DMC) offered more than 281 million Br.
Engineers' estimation of the cost of the construction had been about 235 million Br and AACRA estimated the road would be constructed at an expense of about 245 million Br, while CRBC came up with an even less construction cost of more than 224 million Br.
The construction of the right side of the same road, which had been going on since 2005/06 by the same Chinese company, was completed about eight months ago; it cost 115 million Br. The more than 100 million Br difference in the cost of the construction of the two sides of the road, similar in length, width and standard, is a result inflation, according to AACRA's management.
"This shows the inflation rate of the local and global market in the period between the times the two roads were awarded," said Fekade.
AACRA had signed another contract for the construction of the same road about 10 months back with MIDROC, a local construction firm, which already has business deals with the authority after winning bids for the construction of three roads in the city posted in the 2007/08 budget year. The authority decided to snatch the contract away from the local construction firm when its Board of Directors met on October 20, 2008, alleging that MIDROC had bad records in the three road constructions.
"The cancellation of the contract with MIDROC was instigated by the performance the firm had showed in other contacts with the authority and for the burden that the firm would have faced due to the contract commitments it had already been in with the authority," reads the press release prepared on the signing of the agreement.
At the same meeting, the authority also decided to, and has subsequently taken back the project for the major facelift on African Avenue from Eneyi Construction, another local private firm, for the same reason.
"Sometimes, taking back contracts and issuing other tenders is necessary to keep the quality of constructions we are undertaking," said the general manager of the city's roads authority.
Fekade believes that such an action makes local firms realize what it takes to be a good competitor. In this specific case, however, CRBC caught the authority's because of the lower construction costs that former had presented, he added.
CRBC and AACRA are not new business partners. CRBC is the Chinese construction firm that is undertaking the nine-kilometre long and 40m wide road that runs from Meskel Square to Kality ar a cost of about 295 million Br. CRBC is also in charge of another more than four-kilometre long and 30m wide road that runs from Winget Ring Road Roundabout to the Entoto area, otherwise known as Gojam Ber at a total cost of more than 326 million Br.
Other than the eight projects that had to be transferred to the next budget year due to financial reasons, AACRA currently runs about six road construction projects.
- By ADDISU DERESSE | Addis Fortune
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