•  MeTEC under fire  for causing delays and extra costs
• Salini’s delay claim adds to GERD crisis
• Remaining work outsourced to Alstom & Voith

The construction of the massive Grand Ethiopian Renaissance Dam (GERD) along the Nile, a project treated as national prestige, is lagging behind its schedule and incurring bigger costs than intended, it was revealed. A vital component of the electro mechanical project being executed by Ethiopia’s Metals and Engineering Corporation (MeTEC) has been seriously delayed, even though advanced and unaccounted payments were made, the newly appointed executive director of Ethiopian Electric Power, Abraham Belay said. In a Walta Information documentary, Abraham said that the military-run MeTEC was paid 16 billion birr (60 percent) of the total sum of 25 billion birr agreement, although it executed only 42 percent of the project.GERD, whose construction started in April 2011 and domestically funded, was due for completion in five to seven years.

“This is an unaccounted payment activity. Payments were made with the assumption that they would complete it afterwards, which proved to be wrong,” Abraham said.

According to interviews with a number of government officials conducted by the ruling party-owned news agency, Walta, the payments for MeTEC must have been made after the end of each phase of work but the previous director, Azeb Asnake has disregarded the terms of agreeement. “Payments were made without an effective evaluation of the execution and quality of their work,” Frehiwot Woldehanna, State Minister of Water, Irrigation and Electricity also said.

“Now we will not be able to deliver on time. The early power generation was supposed to start before the completion of the dam two years ago. That was how it was announced in the media. That is not been the case. We should have paused and reflected then,” said Abdulaziz Mohammed, deputy CEO of MeTEC.

“This has not come to light today. There were already indications that the work was lagging and it was not going according to plan,” Abraham Belay told Walta.

This account differed from initial expectations and subsequent promises for a starting date, such has one made by the former Board Chairman of the National Council for the Coordination of Public Participation for the Construction of GERD, Debretsion Gebremichael who said on October 2017 that the dam would start generating hydroelectric power in that year, as quoted by the Ethiopian News Agency.

Italian firm Salini Impregilo responsible for civil work and building saddle dams has relatively advanced, completing 75 percent of the project, Abraham said. Salini made a claim of 3.259 billion birr and 119 million dollars for the cost it had incurred due to delays in the electro mechanical works by MeTEC, it was said.

The 6,450-megawatt capacity hydropower project is owned by the Ethiopian Electric Power and the consultant, Roberto Manigini said, “The electromechanical work accomplishment is more or less 25, 30 percent, which represents half of the whole project. “

“The problem they (MeTEC) put too many things together. Especially after seven years delay, this is a gross error. MeTEC’s experience up to the beginning of this dam was not hydropower experience. So if you don’t have experience, you need to build one…….. They are doing civil engineering with military engineering experience. For sure, there are some problematic,” says the consultant, Roberto Manigini.

MeTEC was established in 2010 by former Prime Minister Meles Zenawi by grouping nine businesses previously owned by the Defense Ministry and involving military personnel, including its head Major General Kinfe Dagnew, with close affinity to TPLF, in a response to a need for import-substituting industries in the engineering sector. It run around 70 enterprises worth tens of billions of dollars, most of them in sprawling industrial plants. There have already been questions of about MeTEC’s capability to execute major projects. On June 2017, the Auditor General told lawmakers that MeTEC was paid 60 percent of the total sum for Yayu Fertilizer Project, although it executed only 42 percent of the project. The work was not completed, though the deadline for the completion of the project was 2014. This was the project that MeTEC took from the Chinese firm Complant, saying it could execute it reducing the cost from $730 million to $540 million and from four years to two years.

MeTEC had no previous experience in dam projects, it was made to involve in the project from the very start because of the project’s security sensitivity, along the way with a view to creating self-sufficiency, Abraham said.

Initial generation from two turbines was slated to begin on 2015. This is unlikely to be transformed into reality in few years’ time, as the hydraulic steel structures, balance of Plant have not been done, Abdulaziz Mohammed, vice director of MeTEC said.

The project has been a source of widespread malpractice, such as using the allocated budget for other unrelated projects, Abdulaziz said. A representative from MeTEC argued lag is justified because they started the project when nothing was provided.

METEC has also been awarded the work of clearing a forest on 123,189 hectares of land that would be as reservoir without bidding. Abdulaziz said that MeTEC has received payments in the amount of 2.5 billion, fifty percent of the sum, while only clearing 37,000 hectares of the land.

Abraham said an inquiry will be held to determine those responsible according to their ranks and responsibilities, including the contractor and the management. He also said care would be doneto avoid similar failings in future infrastructure projects.

“We are trying to trace down the money. Charges would be brought against certain individuals. There will be people who would be held accountable. No one is above the law,” Abdulaziz Mohammed said.

“Since we are not advancing at a required rate, we have decided to outsource the electromechanical installation work to foreign companies, they are now already working at the site. France’s Alstom and Germany’s Voith have rich experience and have already provided equipment’s to MeTEC,” according to Abdulaziz.

Major-General Kinfe Dagnew resigned as MetEC’s Director-General in April and was replaced by former Trade Minister Bekele Bulado.  However, no charges have been brought against him yet. Azeb Asnake was removed from her position on August 22, and replaced by the former Deputy Director of the Information Network Security Agency (INSA), Abraham Belay. A week ago Addis Fortune reported that MetEC is splitting into two parts, commercial and defence, following an order by Prime Minister Abiy.

“To facilitate the split, eight separate committees incorporating members of the Corporation, the National Defense Forces and the Ministry of Defense have been formed. A lead committee chaired by Minister of Defense Motuma Meqassa that includes Berhanu Jula (Gen.), operations chief of the Ethiopian National Defense Force, and Molla Hailemariam (Lt. Gen), chief of the Army Logistics Department, has also been formed,” the paper wrote.

Image: The Grand Ethiopian Renaissance Dam (GERD) (Atlantic Council/J. Peter Pham)

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