Investigation: Shedding Light On The Convoluted CCECC, Somali Water Project Scandal

Former Somali Water Bureau chief claims dismissal was political

Owing to its dry lowlands and scarce surface water, the Somali Regional State, like much of eastern Ethiopia, is constantly at risk of droughts and water shortages. Although the region sits on significant groundwater reserves, as well as natural gas deposits that are purported to play a key role in the government’s plans for the near future, the resources remain untapped.

Jijiga, a jewel in the middle of the dry eastern lowlands and seat of the Somali regional administration, is not immune to the severe water supply problems. The city requires an estimated 40,000 cubic meters of water daily, but current infrastructure can hardly cover more than 20 percent of demand.

When Somali regional administration officials, led by President Mustafa Omar, inaugurated the Jigjiga clean water project in June 2024, residents celebrated what they thought would be an end to their struggles and thirst.

Regional and national state media outlets trumpeted the 1.4 billion birr project, officially called the ‘Jigjiga Water Project Phase Two,’ as a triumph. Higher-ups in the regional water bureau appeared for interviews, lauding the project and asserting it would double the city’s water supply to cover 52 percent of its population.

– Advertisement –

The project also garnered applause from Prime Minister Abiy Ahmed.

Nonetheless, a few months following the inauguration and ensuing fanfare, Jigjiga’s neighborhoods were no wetter than they had been before. Residents and officials who spoke to The Reporter over the last couple of months say that supply from older infrastructure has dried up, let alone from the new project.

Jigjiga has long relied on Jerer (Waji) and seven of its wells located some 20 kilometers north of the city for freshwater. However, these wells are far from enough to meet demand.

Sources told The Reporter that the new project has affected existing infrastructure, and that its failure comes down to corruption and mismanagement.

Earlier this month, The Reporter published an article describing the water shortages in Jigjiga, as well as exploring the allegations of corruption in relation to the recently inaugurated project. Barely a week following publication, Mustafa Omar dismissed the head of the Somali Water Resources Development Bureau, Hassen Mohammed, replacing him with the deputy head of the Somali Prosperity Party chapter, Mohammed Umer Ahmed.

Almost immediately, Mohammed was replaced by Ahmed Mirad, an engineer.

The Reporter’s publications sparked media and legal campaigns from Somali regional officials and representatives of the China Civil Engineering Construction Corporation (CCECC), which was a contractor involved in the project. People involved in these campaigns have denied the allegations of corruption, and stooped to disseminating misinformation aimed at discrediting The Reporter.

The Reporter has since carried out a comprehensive investigation into the issue, gathering information and documents from official sources to shed light on the intrigue behind the troubled water supply project.

Background

The second phase of the Jijiga Water Project was launched in 2017, comprising plans to extract groundwater from Fafaan, a site located less than 25 kilometers from the city.

However, less than a year later, the project was paused during the political transition of 2018, which saw the tumultuous rule of Abdi Illey give way to a relatively more stable administration led by Mustafa Omar.

The new administration moved quickly to kick the then contractor off the project, leading the contractor to file a lawsuit seeking 120 million birr in compensation for alleged unlawful termination. The regional Water Bureau countersued, demanding an unspecified sum from the contractor for alleged delays.

The case is still ongoing, sources informed The Reporter.

Lawsuits aside, the project remained inactive until 2021, when the regional administration turned its attention to Jigjiga’s chronic water problem. Officials decided to resume the project, dubbing the endeavor ‘Phase Two.’

In June 2021, the Somali Water Development Bureau (SWB) awarded the project directly to CCECC, while MS Consultancy was hired as a supervisor.

Documents obtained by The Reporter indicate the Bureau consulted five Chinese contractors before eventually selecting CCECC. The decision contradicts Ethiopian public procurement laws, which require competitive bids and permit a direct award only in the case of a lack of competitive candidates.

Nonetheless, the contract was signed and stamped by Abdirahman Ahmed Hassan, former SWB chief.

On June 22, representatives of CCECC sent a letter to the Bureau, confirming their acceptance of the contract. The letter was signed by Guo Chongfeng, an authorized representative of CCECC.

The contract agreement, which was signed two days later, stated that the entire project was scheduled for completion within a 12-month timeframe. It also authorized the disbursal of 30 percent of the project cost within the first 90 days.

However, construction had yet to begin three months following the signing, with CCECC demanding a price revision.

The contractor, represented by Wu Jiuyi, Bureau chief Abdirahman, and the supervisor, represented by Mesfin Shenkute, met to discuss the project and the price revision request on October 11, 2021.

“Twenty-five percent of the project time has lapsed but progress is well under five percent. Despite repeated verbal and written notice to the contractor, project progress remains, by any standards, below what was originally planned. This indicates that the contractor has stopped project work of its own volition,” said Abdirahman, demanding an explanation from CCECC’s reps.

They responded by claiming force majeure owed to a surge in market prices for raw materials and equipment brought on by COVID-19, currency depreciation, and rising logistics and DCI pipe costs, according to a record of the meeting’s minutes obtained by The Reporter.

The contract clearly stipulated that price increments would not be considered a valid justification for force majeure. Yet, CCECC reps argued they were unable to continue the project without a price revision, again going against the terms of the contract, which permitted a price revision only after a 12-month period.

CCECC demanded an additional 227 million birr just three months after signing on to the project.

The consultant stated that CCECC’s force majeure claim was “unacceptable” and prompted the Bureau to take decisive action on whether to continue with the firm or rescind the contract.

“The contractor failed to carry out almost all the works within the period specified in the contract. Hence, the Bureau can terminate the project and make the contractual claims, including the liquidation of the performance bonds,” reads the consultant’s advice.

Nonetheless, the Bureau decided to grant CCECC an additional 150 million birr after negotiations, which knocked off one-third of the initial request.

Abdirahman approved the price increment in October 2021. The following month, he was replaced by Hassan Mohammed, who led the Bureau until he was dismissed a few weeks ago.

Recounts of the Former Bureau Chief

“When I took over, everything regarding the agreement [with CCECC] was done. I only began implementing the project, which I did properly,” Hassan told The Reporter.

He vehemently denies any involvement in the drafting or signing of the project contract agreement, which was carried out prior to his term in office.

After leaving the Water Bureau, Abdirahman landed a post in the regional Economic Bureau and is currently a member of the Prosperity Party in Somali.

Hassan, on the other hand, led the Bureau for a little over three years before he was dismissed by President Mustafa Omer few weeks ago. He was succeeded by Mohammed Umer Ahmed, a senior Prosperity Party member, who was himself almost immediately replaced by Ahmed Mirad.

“The new candidate was assigned to lead the bureau while I was still in the position. There was no letter or notification sent to me informing me whether I had been removed from the post or not. Neither did I resign,” Hassan told The Reporter.

He claims the regional administration removed him from his post without due process. He also believes his unceremonious dismissal was not related to corruption allegations tied to the Jigjiga water project.

“I am the cleanest official in the region. My dismissal is not related to corruption or inefficiency,” Hassan told The Reporter.

He thinks the motivation behind his dismissal was political in nature.

“As a politician, and as a bold and principled official, I am always ready to confront any official about issues that I do not agree on. I always side with the interests of the public and do what benefits the public and the region. This is potentially the reason why I was dismissed. I have nothing to do with corruption and inefficiency,” said Hassan.

The Contract

The Reporter’s investigation found inconsistencies in the agreement with CCECC, raising further questions about the terms of the deal and the project’s execution.

The contract document contains provisions allowing CCECC to hire subcontractors with approval from the Bureau, and permitting price revisions pending engineer approval (the engineer being MS Consultancy).

The contract’s confidentiality section prohibits signatories from disclosing information relating to the deal and the project with any other third party prior to, during, or following the completion or termination of the contract if the disclosure would be “contrary to law, would impede law enforcement, would not be in public interest, would prejudice legitimate commercial interest of the parties or would inhibit fair competition.”

The contract required CCECC to deposit 10 percent of the project cost (initially 75 million birr) as a performance security guarantee within 10 days of signing the agreement. The contractor was also obliged to present a bank guarantee for 30 percent of the project cost as security for the advance payment.

The advance was paid to CCECC in two installments, according to the documents. The first, comprising 10 percent of the project cost, was supposed to be paid out within two weeks of signing the deal. The second, comprising 20 percent, was supposed to be disbursed within 90 days.

However, documents attached to the files reviewed by The Reporter showcasing the performance security bond and the advance payment bond are blank. Only templates of the respective forms were found attached, with the Bureau’s official seal stamped all over the blank pages.

The Reporter has been unable to find any documents or data that indicate that CCECC provided the guarantees in accordance with the contract, despite reviewing documents from the Ministry of Water and Energy and the Somali Water Bureau.

Another glaring inconsistency is related to the project price revision.

According to the contract agreement, CCECC was ineligible for price adjustments until 12 months had passed from the contract’s effective date. However, breaching the terms, the Bureau approved an amendment just five months after the initial signing.

On November 10 2021, the Bureau and CCECC signed another agreement, amending the project price following months of little or no progress on the project. The Bureau justified the amendment by citing the Birr’s depreciating value.

“The public body [the Bureau] agrees to approve a price revision amounting to 20 percent of the project cost or 150 million birr,” reads the amended document.

The decision would pull the project cost to 900 million birr just five months after CCECC was onboarded.

The amendment was signed by Hassan Mohammed Hussein, who had by then replaced Abdirahman as head of the Bureau.

The terms of the contract relating to liability also raise questions.

The contract holds the contractor liable for defects, damage, or omissions during a year-long ‘defects liability period’ beginning at the completion of the project. Accordingly, CCECC is liable to cover costs if the project fails to function properly within a year of its inauguration.

“The works shall not be accepted until the prescribed verifications and tests have been carried out at the expense of the contractor,” reads the contract. But the agreement also allows provisional acceptance.

The engineer, MS Consultancy, is responsible for granting the contractor a final acceptance certificate following the completion of its obligations. CCECC’s attorneys have informed The Reporter that the contractor has already secured the certificate, but declined to show proof.

Instead CCECC representatives and their attorneys provided digital documents with redactions in the sections that refer to payments and financing.

People familiar with the project say it has failed to function despite being inaugurated more than eight months ago. They also claim the new project has negatively impacted existing infrastructure.

Under the terms of the contract, CCECC is liable for costs related to defects and damage.

However, Hassan told The Reporter that the project is functioning as intended, and that the criticisms arise from exaggerated expectations of its capacity. He said the Jigjiga water project can supply up to 10,000 cubic meters of water to the city each day, far less than the 40,000 cubic meters its residents so desperately need.

The Project

The Faafan well field consists of nine boreholes, and CCECC was brought on to finalize the boreholes and an elevated reservoir, install a water system, and lay pipes connecting the site to Jigjiga. Although not explicitly mentioned in the contract agreement, there are sentences that hint that some work on the well field had already started when the project was initially awarded to the first contractor in 2017.

However, the contract agreement with CCECC clearly states and details its tasks under civil works, mechanical works, electrical works, pipes and fittings, and other categories.

Much of the work revolved around finalizing the reservoirs, installing pipes and fittings, and laying the distribution lines. CCECC was charged with wrapping up the existing 5,000 cubic-meter Karamara Reservoir, and the north and south Fafaan reservoirs each holding 500 cubic meters.

The contractor was responsible for connecting the Fafaan well field with the Karamara Reservoir and connecting new pipelines to old ones. The lengthy contract also laid out terms for a wide range of tasks in structural and foundational earthwork, formwork, civil work, and pipework to be carried out by CCECC.

Some of the tasks include the construction and installation of foundations, roads, manholes, vent pipes, and trenches. Electromechanical works are also part of the contract.

“The contractor shall check the structural design of the reservoirs and submit structural drawings for the approval of the supervisor. Scope under this contract is to erect the building as shown on the drawings,” reads one section.

The Blowback

Despite the clear evidence in the contract agreement documents and other sources, CCECC reps, Somali Water Bureau officials, the Somali Communications Bureau, and the Somali regional administration have all moved to distort the facts and attempt to intimidate The Reporter to retract its coverage of the Jigjiga water project and the surrounding controversies.

Attorneys representing CCECC have attempted several times to have the two articles published by The Reporter on the subject retracted.

Tewodros Getachew leads CCECC’s legal team.

According to his website, Tewodros is currently the president of the Ethiopian Federal Advocates Association (EFAA) and vice president of the Pan African Lawyers’ Union (PALU), the union for all African bar associations.

The website in his name also states Tewodros has dozens of institutional roles, including as a member of the Advisory Council for the Federal Supreme Court of Ethiopia, and a board member of the Law and Justice Institute of Ethiopia, among others.

In a letter addressed to The Reporter on February 13, 2025, CCECC and its attorneys stated the coverage was untrue and claimed the contractor only signed on to the second phase of the Jigjiga Water Project to finalize minor works, while the bulk of the project was the responsibility of another, unnamed contractor.

“CCECC is one of the contractors only responsible for part of the whole clean water project, which includes the procurement and installation of pipelines and fittings, but does not include the construction of wells and transporting water to residents. CCECC has already finalized its specific tasks as per contractual obligations and has secured a provisional acceptance certificate,” reads the letter.

The claims directly contradict the terms of the contract agreement, which clearly lay out the vast number of CCECC’s responsibilities as the lead contractor. The letter also fails to name the other contractor(s) who allegedly led the project, and does not address why the Somali Water Bureau would pay out 900 million birr to a contractor tasked with minor works.

“The Reporter’s article statement regarding ‘Chinese contractors are allegedly involved in corruption in the construction industry, as well as foul play in public procurement procedures’ is also clear defamation and unsubstantiated. It is also a hasty generalization indicating a bias to one country’s corporations and nationals. Apart from huge legal responsibility, this may also trigger diplomatic concerns,” reads CCECC’s letter, signed by Li Qingyong.

The letter was followed on February 21, 2025, by another one demanding a retraction and an apology, and denying any and all allegations of corruption related to the project.

The same day, Tewodros made a phone call to The Reporter’s Editor-in-Chief and threatened to “damage [his] career” if the demands for a retraction remained unmet.

Ahmed Abdi, deputy head of the Somali Water Development Bureau, and Hassan, the former Bureau chief, also issued statements claiming The Reporter’s articles are baseless.

The Reporter would like to state that it has no intention to single out Chinese corporations or citizens. The Reporter has always stood by its balanced, evidence-based, impartial, and responsible coverage and will continue to do so out of respect for its duty towards the cardinal principle of standing by the truth and safeguarding public interest.

The Big Picture

The hundreds of pages of documents obtained by The Reporter indicate that systemic corruption in public projects is deep rooted. Forged bid documents and unlawful direct awards, project price exaggerations and illogical price increments, delays, effecting payments without bond securities, inaugurating projects without proper inspections, are just a few among the many schemes used to embezzle taxpayer money and funding from development partners.

“Big companies taking over the construction industry, in particular, have well-established connections with officials. Projects are awarded under the table. These contractors pay large sums of money, in the hundreds of millions, to officials to win projects,” said an engineer and the general manager of a hydro engineering firm, who spoke to The Reporter on condition of anonymity.

He claims that contractors, supervising consultants, and public officials work hand-in-hand to fabricate documents.

“Different schemes are used to award a project to the selected company. Then an advance payment is disbursed to the contractor, often without a bond guarantee. Then they split the money among the contractor, supervisor and the corrupt officials. As time goes on with little progress on the ground, they begin looking for another budget. Then they approve the additional budget using a range of factors as excuses. Finally, a poor project is delivered,” said the Engineer. “The corruption has pushed genuine contractors and professionals out of the business.”

Sources have informed The Reporter that the Somali Water Bureau is planning to launch the third phase of the Jigjiga Water project, with a reported cost of 20 billion birr and is currently “in the process of obtaining funding.”

The ministries of Water and Energy, and Finance have approved the third-phase, according to the sources. Former Bureau chief Hassan also confirmed that the project has secured a nod from the federal government.

Beijing will provide a loan to finance the project, according to the sources.

“It’s not the scandals related to the first two phases that are worrying the contractor and regional officials. They are worried because this reporting would cast a shadow of doubt over their next plan, which is phase three,” said the Engineer.