Addis-Adama Expressway Hogs Funds

The Ethiopian Roads Authority (ERA) is cutting one billion Birr from the budget of its other road construction projects to pay the advance needed for the construction of the six-lane expressway from Addis Abeba to Adama (Nazareth).

This followed a surprise request for an advance payment of 92 million dollars from each of the financers of the construction, Exim Bank of China and the government of Ethiopia.


The total budget for this road, scheduled to begin this fiscal year, is 612 million dollars, 349 million dollars of which will be obtained from the bank and the rest from the government.

The contractor, China Communications Construction Company (CCCC), needed to be paid an advance with far more than the 141.3 million Br which the Ministry of Finance and Economic Development (MoFED) had allocated.

This company had been active in Ethiopia through China Roads and Bridges Corporation (CRBC), which had been "serving as a flagship, a window, and a platform for [its] overseas operations," according to CRBC's website. CCCC has ranged among the top 500 global companies listed by the US-based magazine Forbes, since 2008.


"When we allocate funds at the beginning of the year, we always do it with an element of doubt," said a budget expert at the Ministry of Finance and Economic Development (MoFED), who requested anonymity because of possible complications related to the deduction of money from other projects. "Whether the financers release the money and the projects will be realised within the fiscal year."

"We set aside that sum for the sake of having some money on hand," he explained. "When the time comes, we are normally asked for a 15pc or 20pc advance payment."

ERA's budget for the fiscal year, contributed from the government, and through loans and grants amounted to 11.25 billion Br for over 200 projects. Now five million Birr to 10 million Br is being deducted from various projects to raise the one billion Birr that has been required for the advance.

ERA will ask for a bigger budget in order to avoid the disruption of projects which have lost part of their budgets for the expressway, an official of the authority, who also requested anonymity, said.


"If this company is related to CRBC, it is okay, because we are happy with CRBC. And if they get more money in advance, the job will also get done faster," said the ERA official.

The expressway will take a different route only 80Km long, 20Km shorter than the existing road from Addis Abeba to Adama. Hundreds of peasant families are expected to be affected by the construction, and their resettlement is expected to cost about 100 million dollars, according to the MoFED official. The construction is expected to begin in two months' time from both ends, and 20 million Br has been allocated for those farmers who will have to be relocated first.

"The construction will take two years," said the expert at MoFED. "We have prepared the relocation budget for each year."