Yencomad Construction Company Friday signed an agreement with the Ethiopian Roads Authority (ERA) to undertake the construction of the 33-km-long Gindeber-Gonbesa road at a cost of 23 million birr per kilometer, making it the most expensive road project to be carried out by a local contractor in Ethiopia to date.

During the signing of the agreement it was indicated that the total cost of the road project is over 755.4 million birr.

ERA is in the process of selecting the consulting firm.

ERA director general Zaid Woldegebriel said that the geographical challenges that the area through which the road runs poses was the main reason behind the project's huge cost.

The director said that the determining factor in the cost of the construction was the volume of work that should be done on every kilometer of the road.

The construction project was awarded to Yencomad through a competitive bidding. The project is part of the government's three-year road sector development program.

The construction is expected to be completed by mid 2012 and the cost will be covered entirely by the Ethiopian government.

The first part of the Mojjo-Ejere-Gonbesa road construction project, a 100-km stretch of road, is being constructed by Yencomad at a cost not exceeding one billion birr.

Upon completion, the road will connect the Oromia and Ahmara regional states across the North Showa Zone.

The project agreement was signed by Zaid Woldegebriel and Yemiru Nega, Yencomad general manager, at the headquarters of ERA.