MPs Question Arbitrary Execution Of Corridor Development Projects Across Nation

“Even medicines have side effects”: Urban Development Minister

The unapproved and unregulated execution of the ‘corridor development’ project in towns and urban centers across Ethiopia took center stage as members of Parliament grilled officials from the Ministry of Urban and Infrastructure Development on Thursday.

Minister Chaltu Sani and her deputies appeared before MPs this week to present a half-year performance report. The officials depicted an optimistic picture of the past six months before lawmakers, spearheaded by Eshetu Temesgen (PhD), vice chairperson for the Urban Infrastructure Development and Transport Affairs Standing Committee at the parliament, fired dozens of questions at them during a question-and-answer session that lasted longer than three hours.

Most of the questions pertained to problems hampering the construction industry. But a fresh concern under the spotlight were issues relating to the corridor development project initiated by the Office of the Prime Minister.

“The initiation of corridor development projects in big cities is showing good results. However, the trend is catching on in small towns. The initiation of projects in small and large cities simultaneously is draining the government budget. Couple with rising inflation and delays, the project is raising complaints from residents. How is the Ministry regulating the corridor development initiative?” asked Genet, Chairwoman for the Urban Development sub-committee at the House of Peoples’ Representative (HPR).

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The government has yet to disclose the source of funding for the project, which has been going on for a year now. The large number of residents being relocated to make way for green areas and the clearing of land for private development ventures has been a bone of contention, particularly in Addis Ababa.

“Though highly politicized, the corridor development initiative is having a positive impact,” said the Minister.

Chaltu criticized city and town administrations for their arbitrary implementation of the project and indicated the project envisions covering 40 percent of urban land with green areas.

“For us, the issue of urban greenery is not about aesthetics, it is an existential issue for our urban areas. The corridor development initiative is also about just property distribution and economic equality. We have revised urban plans. Corridor development projects are not for the government or for some political party, but for urban residents. Property values are also climbing. People are taking walks, contributing to resident health,” the Minister told MPs.

Fifty-eight cities and urban centers in Ethiopia are implementing their own corridor development projects, according to Chaltu.

However, the real number is likely higher.

“Which cities and towns should carry out corridor development projects, and which ones should not? This is the right question raised by the MPs. So far, even very small towns across the country are working on corridor development initiatives. We are seeing them demolishing properties without having even a single building. This is very wrong,” said Chaltu.

The Ministry has laid down guidelines that dictate which cities and towns should take part, with criteria involving population, economic activity, and potential impact, according to Chaltu.

“But even towns with one or two kebeles are embarking on corridor projects. This is not what the plan was. The plan is to carry out corridor development projects only in major cities and towns. What is happening is very wrong,” said the Minister.

The issue was also a top agenda during the recent Prosperity Party central committee.

The committee decided to halt the demolition of property, according to Chaltu.

“In areas where demolition has been undertaken already, corridor projects should be properly developed and available for public use. People who are displaced from these areas also should get jobs in housing projects. That was what was decided by the party and the government,” said the Minister.

She told MPs the project’s positive outcomes outweigh its negative impacts.

“Even medicines have side effects. But by and large, corridor projects have fundamentally changed our urban image, society and improved economic activity,” said Chaltu.

Directors and other officials from the Ministry emphasized ‘success’ in achieving increased revenues through mechanisms like property taxes.

However, Melka Bekele from Ethiopian Roads Administration (ERA), listed a number of challenges the road sector is facing, particularly in security and budget disbursement delays.

“Accessing cement, explosives, bitumen and other construction materials has become challenging. Imported commodities have become scarce,” he said.

Explosives required for construction are especially hard to come by, and prices have grown prohibitively expensive, according to Melka.

“The cement market has been improving recently. But the large difference between the factory and market prices has been discouraging contractors,” said Melka. “The availability of machinery has also become problematic. There are no imports due to a lack of forex and most machines in the industry are old. Even renting has become very expensive. Inflation is having a huge impact on the construction industry,” he told MPs.

The scarcity of fuel is also crippling contractors, while fuel costs for a single construction project have soared, leading to delays. Contractors spend as much as 20 million birr on fuel for a single project, according to Melka.

“The other issue placing a huge burden on project performance and the industry is security. There are security problems in some parts of the country. It is improving but there are pockets. Some 27 projects could not be started due to security problems. In parts of the country where there are security issues, it has become difficult to supply materials,” he said.

Issues with budget disbursement have also been a headache, according to Melka.

“The government allocated a 96 billion birr budget for the construction sector this year. We need eight billion birr disbursed every month, on average. We understand there are budget constraints, but, unless there is smooth cash flow and at least five billion disbursed monthly, projects will be impacted,” he said.

He indicated frequent interruptions in disbursement and a sizable backlog of forex payments are among the challenges facing his agency.

Issues related to right of way have also been troublesome, according to Melka.

“The right of way compensation proclamation is not uniformly implemented. Contractors are losing capacity and need capacity building works. Some regional states do not implement the proclamation. But due to inflation, compensation claims have surged,” he said.

Melka told MPs that claims are typically exaggerated. He indicated the unclear divide between federal and regional jurisdictions is creating confusion.

“The Ministry introduces regulations and builds capacity and indicates problems so that regional governments undertake measures. But they don’t,” said Melka.

The central bank’s credit growth cap, which was recently revised, has also prevented contractors from accessing credit, leading to more delays, according to Melka.

Chaltu acknowledged the delays in public projects under the Ministry, but said the situation is improving.

“There are internal and external factors for the project delays. We have to bridge at least the internal deficits, especially for roads and other public projects,” said the Minister.

She called on Parliament and the Ministry of Finance to offer a solution to right-of-way compensation claims determined prior to the ratification of the compensation proclamation.

“Municipal revenues substantially increased after we introduced new revenue streams like property tax and others. This is a big achievement. There are several projects delayed due to security issues. There are parts of the country where contractors have failed to go and start work due to security problems,” said Chaltu.