Ethiopian Review

The Ministry of Finance and Economic Development (MoFED) has written a letter to the Ethiopian Road Authority (ERA) asking it to revise its 13 billion birr budget request for the next fiscal year (2009/10) to nine billion birr.
According to the ERA’s budget plan for next year, the authority is demanding 15.6 billion birr for ongoing and new projects, which is 3.6 billion birr more than the amount the ERA requested for the current fiscal year.
From the total sum, ERA will need about 13 billion from Government with the balance coming from external loans and grant providers, and from the Ethiopian Road Fund.
Sources disclosed that MoFED’s letter stated that it cannot provide this much for the authority from its total budget.
Next year’s Government budget has not yet been released officially.
In the coming budget year, ERA is projected to begin 23 new projects in addition to the projects currently being worked on by contractors and the authority’s taskforce.
“The budget shortage will force the authority to postpone some projects or to do them cheaply,” a source at ERA told Capital. According to ERA’s source, even though the budget shortage has occurred this budget year, the authority prefers to implement some projects at low cost, rather than to move them on to next year’s books.
ERA had requested 12.2 billion birr for the current fiscal year, but the Government approved only 5.5 billion. According to sources, in general the authority has secured over 11 billion birr from different sources, including the Government, for its projects until the end of this year.
The Ethiopian Government has been focusing on developing the road coverage of the country for the last ten years, and the authority’s budget has been larger than other federal agencies for several years in order to implement the Road Sector Development Programs (RSDPs).
The 189 road projects the authority plans to undertake in this budget year include 34 new roads, four bridge installations, the upgrading of 28 main roads and 42 feasibility studies and design works nationwide.
According to the RSDP III (2007/08 to 2009/10) it aims to increase the current 100,000 kilometres road network to 135,500km after its implementation period ends. It will work on more than 2,000km road constructions, 3,400km of upgrades and 483km of rehabilitations.
But experts at ERA said that according to the current budget deficit, the program will not meet its plan, as the previous two RSDPs did.
Sources at MoFED, told Capital, the Government’s capital budget next year is mostly devoted to the construction projects of road and universities.
According to those sources, the Ministry of Education (MoE) plans to construct ten new universities all over the country, not including the 13 universities currently under construction. MoE also requested around 12 billion birr for the coming fiscal year, which is the second largest budget request after ERA.
In a related development an agreement was recently signed for the construction of the last 96km of the Wukro-Adigrat-Zalambesa road upgrading project. Last Thursday, ERA and a Chinese firm, China Railway Number 3 Engineering Group sealed the contract worth over 530.1 million birr.
The supervisor is a local company, Saba Engineering in sub consultancy with Kuwaitis, Gondwana, and Al-Abdulahdi Engineering Consult.
According to Gelesu Bure, deputy director general of ERA, the contract is the final stage for the northern part of the country’s asphalt road coverage, which connects with central Ethiopia. Currently, from the 919km asphalt road project, over 500km has already completed and the rest is under construction by local and foreign contractors in addition to the authority taskforce.
The funds for the construction of the 96km asphalt road were secured from the Kuwait Fund and the Government. The construction of the road will be completed within 30 months’ time.
ERA deputy director general, Gelesu Bure and the group’s assistant general manager, Liv Weizhi signed the agreement in Addis Ababa.

By Muluken Yewondwossen | (Capital)