Ethiopian Business Development Services Network (EBDSN)

 The Ethiopian Construction Sector

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 Overview of the Construction Sector  [top]                                                              


Info from US Embassy- Addis Abeba, Commercial Section Report

Overview
Econ/commercial officers met with the general managers of several private construction firms and government enterprises regarding Ethiopia's construction sector. Many of these firms specialize in building roads and bridges but several have won recent contracts for office buildings in Addis Ababa. One local firm is slated to build a new Ethiopian embassy in Djibouti.

Despite the lull in business activity and foreign investment because of the Ethio-Eritrean border dispute, a dozen or so large projects are moving along. In addition, the donor-funded road sector improvement project is creating a lot of opportunities for construction firms and significant demand for building materials. This message examines the problems faced by the firms in the construction industry and the strategies these firms and Ethiopian government agencies are taking to address them. End overview.

Equipment and materials
Although most wood and concrete building materials can be obtained locally and several firms are providing sophisticated steel products, Ethiopia must depend on imports for most other inputs in the construction industry. For example, Ethiopia imports diesel fuel, explosives, steel panels, welding parts, timber and plywood, composite material panels, and bitumen from overseas. The majority of these materials are brought in from Europe and Saudi Arabia.

The four oil companies operating in Ethiopia -- Shell, Mobil, Total, and Agip -- supply the necessary diesel fuel and lubricants. In addition, Shell is the main bitumen dealer in Ethiopia. The construction of a ring road around the capital and the donor-funded Road Sector Improvement Project have increased the need for hot bitumen in Ethiopia. Shell is developing its Djibouti plant and bitumen transport fleet to meet this demand.

Government regulations pose obstacles
According to the general manager of one construction firm, the construction sector faces several bureaucratic obstacles. First, government regulation of contracts has gotten stiffer. Construction firms are now held entirely responsible for any building delays, even when caused by government interference through agencies such as the customs authority. The contracting firm is then responsible for paying fines and damages. Several managers commented that besides the unfairness of the regulation and the lack of any due process in assigning blame, this mechanism could encourage corruption. Firms have a lot to gain for potentially little cost if they can circumvent the financial damages.

Another manager said that non-payment is a common problem, even occasionally with government contracts. Once the building is finished, individuals may delay or refuse payment, claiming there is no funding. Going to court for retribution is an expensive and onerous process. In addition, government regulations require that both contractors and consultants carry out only projects permitted within their license. This issue has restricted construction firms from diversifying their projects and forced them to purchase expensive equipment to keep on hand, as required by their licensing provisions.

The general manager of the Ethiopian Investment Authority said the construction industry is one of the most important for Ethiopia because it affects all sectors of the economy. Investment in nearly every field must eventually have a construction component. Foreign participation and technical expertise in the design and construction of buildings and roads is sorely needed in Ethiopia.

In addition, Ethiopia needs steel structure technology and manufacturing. Currently, the country imports steel from Korea, South Africa and Saudi Arabia. It would be cheaper, however, to import the raw materials and manufacture steel needed for construction locally. The investment authority would like to see more partnerships and joint venture foreign companies but many potential investors are scared away by Ethiopia's land ownership regulations and the high price of leased land.

Scarcity of finance
Finance is another big problem in Ethiopia's construction sector. According to one manager, obtaining letters of credit and the collateral requirement for loans are major hang-ups in the construction industry. First, contractors lack financial management skills. Second, most contractors want to use their machinery as collateral for loan borrowing purposes. However, the banks have problems identifying the true owner of the machinery. Moreover, banks are suspicious that contracting firms are awarded projects that are outside their abilities or beyond their capacities to finish on time. Financing issues impact construction companies as well. They are often unable to expand their business because of government regulations prohibiting private firms from borrowing money from foreign banks.

Big projects off-limits to domestic firms
Although the majority of Ethiopia's construction firms specialize in infrastructure rather than buildings, most of them lack the experience and the capacity to undertake major road projects. It is difficult for local companies to meet the strict pre-qualifying conditions established for projects financed by the World Bank or African Development Bank. For example, World Bank projects require a strong capital base (by one estimate nearly $3 million) and extensive international experience. As a result, nearly all of the road projects go to international contractors and local firms are forced to take only small projects. Several firms are working around this issue by teaming up with international firms to meet the capital standard and win major contracts. This arrangement would also bring greater technical experience and other benefits in technology transfer.

MIDROC in the big leagues
The biggest construction firm on the local scene is MIDROC construction, a sister company in the MIDROC family of companies controlled by Sheik Mohammed Al-Amoudi. MIDROC secures most, if not all, of the construction projects for the companies within the MIDROC (al-amoudi) umbrella. It bids on, and wins, many other large contracts in Ethiopia as well. MIDROC built the Addis Ababa Sheraton hotel and continues to work on other buildings within the Sheraton compound, including an Ethiopian restaurant that will accommodate 500 people.

MIDROC also won the contract to build the residence for the OAU secretary-general (toward which Al-Amoudi donated 20 million birr) and the new OAU conference hall and four-story office building (at a cost of 65 million birr for the labor only -- the materials are being donated). MIDROC is building the company's corporate headquarters near the sports stadium, as well as the Salaam Hospital, the Summit plastic bottling plant, a pharmaceutical plant, the Star laundry soap factory (for 20 million birr), and new facilities for the Ethiopian Leather Industry Corporation (ELICO).

Outside of Addis Ababa, the company is working on the Pepsi-Cola bottling plant in Awassa, a new office building and hospital in Mekele, and the Kombolcha steel products factory. The company is also slated to build hotels for Al-Amoudi in Debre Zeit, Arba Minch, and locations along Ethiopia's historic route.

Customs and clearance
Imports of construction machinery and equipment, together with spare parts up to 15% of their value, are exempted from customs duty, sales tax and excise tax. Frequent changes of management at the customs office, however, has made it difficult for companies to establish a track record and facilitate the entry of their products and materials. Each company has had to reintroduce itself to a revolving door of new general managers and sign separate agreements for the expeditious clearance of imports. Several managers commented that "the customs clearance process can take a long time." For MIDROC, the clearance process on imports is usually facilitated by the energy house in Saudi Arabia. At present, MIDROC only buys some specialty products from within Ethiopia but in the future it plans to increase the amount of local procurement.

Another problem construction companies faces is in the use of technical personnel. As products become more sophisticated, the high technology equipment requires the hiring of technical experts. The government charges the company a 40 percent tax on the salary. Besides paying a wage of $7500 each month, the company must pay another $3000 in taxes on top of that. The companies argue that the government should not tax know-how that goes along with the machinery and equipment.

Skilled labor a rare commodity
Several construction firms have expatriate employees on their staff. MIDROC has 16 foreign workers, though this number has fallen by two-thirds since the construction of the Sheraton. To save on overseas living expenses, the company has built up local capacity, often sending employees on overseas training programs and developing skills-enhancement programs on-site.

One manager noted that the demand for skilled masons and plasterers has risen so much that they can command "any salary they please." Several companies noted that skills are not cultivated within organizations or in commercial training schools and are not being passed down to the present generation.

This dearth of skilled laborers must be addressed for Ethiopia to attract additional investment and improve the quality of the workforce in the construction industry.

 

 


 Products and Companies  [top]                                                                                       


Some of the leading companies in the Ethiopian construction sector are the following:

  • Addis Block Production

  • Awash Construction Enterprise (ACE)

  • Batu Construction

  • Blue Nile Construction Enterprise (BNCE)

  • Brick Product Share Company

  • Building Design Enterprise (BDE)

  • National Engineers and Contractors Enterprise (NECE)

  • Prefabricated Building Parts Production Enterprise (PBPPE)

  • Transport Construction Design Enterprise (TCDE)

  • Water Well Drilling Enterprise (WWDE)

  • Water Works Construction Enterprise (WWE)

Go to the detailed overview of leading companies

 

 


 Business Associations [top]                                                                                          


Construction Contractors Association

Tel. 251-1-62-59-05, 76.51.82, 77.75.57/8

09-62.97.64, 09-65.19.78

Fax 251-1-61.38.97, 75.20.10, 62.01.92

e-mail: consass@ethionet.et , century@ethionet.et

 

 


 Construction Consulting Enterprises  [top]                                                              


 

Name of Consulting Enterprises

Contact Person

Zone/District/ Kebele/House

Teleph.

   No.

P.O.

Box

Construction Design Plc.

Abriham Alemayehu

3/19/47/-

420800

40036

Transport Construction Design Plc.

Liulekal Kase

2/21/4/-

515888

41726

National Architect & Engineer Advisors

Asefa Bekele

3/18/26/270

510544

41726

ACB Engineer & Architect Advisors

Seyifu Birke

2/21/1/490-10

156854

4010

Tesema Demise Architect & Engineer Advisors

Tesema Demise

4/13/10/579

552420

3618

National Engineers & Architect and Engineer Advisors

Kassa Hayile

2/21/1/93-6

159299

5205

Getachew Bekele Studio Architect & Engineer Advisors

Abriham Lema

2/21/1/104-45

157672

4759

Sileshi Architect & Engineer Advisors

Sileshi Yehwalashet

5/2/12/71 30-31

152475

1405

Solomon Ferede Studio

Solomon Ferede

2/21/1/112-19

154020

3976

Mulugeta Asfaw Architect & Engineer Advisors

Mulugeta Asfaw

3/18/41/400

651821

40570

Universal Architect & Engineer Advisors

Destalem H/Silase

3/18/6/1005-17

155258

89100

Afar Architect & Engineer Advisors

Gebremeskel Tesfa

2/21/1/132-28

515109

7607

Hayilegebriel Gebresilase Engineer Advisors

Hayilegebriel Gebresilase

3/19/49/609

654754

4886

Saba Engineering

Samson Bekur

6/27/11/1382

341065

62668

Mat Architect & Engineer Advisors

Mohammed Ahmed Taha

 

553466

8949

Dana Road Engineering Advisors

Daniel Afework

3/18/27/932-2

510535

449-1110

Continental Engineering & Architect Advisors

Kelemu Sinke

3/17/23/-

625578

22640

Consert Water Work Advisors

 

3/19/50/179

655533

6064

BS Architect & Engineering Advisors

Belete Shewakena

4/16/4/968

613825

190213

Gatmates Architect & Engineering Consultants

Mersha Medemdemiya

4/15/27/745

533372

1264

Global Consulting Engineers Plc.

Birinesh Asfaw

2/20/46/929

663385

56910

Escape Architect & Engineering Consultants

Simeneh Kelil

3/17/21492/ 620331

11737

 

Trans Com Road Works Consulting Engineers

Alemayehu Mengesha

2/23/12/202

710997

5973

Akme Consulting Architect

Dr. Mulugeta Metaferia

2/21/1/455-8

151063

30904

Metaferia Consulting Engineers

Amehayesus Metaferia

3/18/27/988

517420

3192

Associate Engineers Consulting

Mersha Sahile

 

509220

512680

41780

Fastek Electrical Works Consulting

Fisihaye Kelate

3/17/20/111

517935

7480

Sunmake Sanitary Consulting

Werede Melaku

 

624077

 

Beyene Alemu Water Works Consulting

Beyene Alemu

3/17/13/700

185960

100190

Baktek

Dr. Bekri Yesuf

-/18/36/803-17

516745

4102

Belu Consulting

Befkadu Lulu

4/15/26/540

516745

4102

GL Consulting

Gezahegn Lema

3/19/47/19

166991

70507

Gondwana Consulting

 

3/17/20/199

260036

23976

MH Engineering

Dr. Mesele Hayile

3/18/20/199

633080

1553

Safe Consulting

Fikiru Yisihak

3/17/53/222

188868

10596

Country Consulting

Balcha

3/17/23/2193

622460

1110

ETG Designers & Consultants

Eshetu Temesgen

-/17/17/227-34

623952

12756

Water Works Designing & Control Organization

 

 

615372/73

 

Civil Engineers Association

Engineer Shiferaw Bizuneh

 

625905

516745

20930/

1000

Architects Association

Ashenafi Gosaye

 

553466

09/237638

 

Building Engineers Association

Mohammed Sherif

 

09/214204

09/208430

 

Consultants Association

Seyifu Birke

 

159299

515647

3192

Electrical Engineers Association

Solomon Zewdie

 

463033

551022

385

Mechanical Engineers Association

Tesfaye Kidane

 

515002

293414

 

Watek Plc.

Feth Jihad

 

614962

 

Yadot Business Group

Yosef Teghen

 

519775

 

Water Well Works Enterprise

Arefeayine Gebrehawariyat

 

513588

 

Hydro Construction

Mr. George Astaverun

 

514804

 

Redsem Geo-tech Plc.

Worku Woldemarkos

 

615978

613856

 

Axesis Engineering

Adisalem Zeleke

 

526554

 

China Geo-Engineeering Corporation

 

 

09/207268

09/207988

 

NA Consulting

Nega Adisu

2/20/40/898

502971

713143

14815

Wub Architectural & Urban Development Consulting

Dr. Wubshet Brihanu

 

09/219545

 

Tariku Belay Consulting Architects

Dr. Tariku Belay

 

09/236591

 

Sikas Consulting Architects

Solomon Kassa

 

727779

 

Camini Studio Consulting Architects & Engineers

 

 

222195

 

Lepan Africa Consulting Engineers

 

 

661806

 

Addis Consulting Architects & Engineers

 

 

652276

 

As-as Consulting Construction Management

 

 

653959

55207

Eludi Consulting Architects & Engineers

 

 

632385

 

Saver Consulting Architects

 

 

613809

24753

Unicon Road Works Consulting Engineers

 

 

630763

 

Wosen Aweke Consulting Architects

 

 

537053

496

Lay Consult

 

 

153695

30870

Perovica Gelancher Practising Architect

 

 

636618

4085

Bic Engineering Water Works Consulting

 

 

514373

5279

Light Stream Consulting Architects

 

 

09/608572

510522

 

Best Consulting Engineers

 

 

515850

512951

 

Lewem Consult Architects & Engineers

 

 

 

 

Alfa Consulting Architects & Engineers

 

 

507374

19801

Shinider Hayimiletin Bayikedagn Consulting Architects & Engineers

Behayilu Bayikedagn

 

09/201703

23974

Beza Road Works Consulting Enterprise

 

 

 

 

 


 Construction Training Centers  [top]                                                                         


 

Name of Training Center

Disciplines

Address

Telephone

Ethio Fetan Technical Training

Wood Work, Building Construction

Gulele 10/11/12

750152

Hibiret Technical & Vocational College

Building Construction

Bole /6

632033

Kokeb Technology & Business College

Drafting, Surveying

Bole /3

636391

Nur Selam College

Building

Nefas Silk Lafto /3/5

725925

SOS Vocational Training Center

Wood Work

Akaki Kaliti

341703

340907

Rapid College

Building Construction

Akaki Kaliti

340564

NECAT Engineering College

Building, Drafting, Surveying

Kirikos /4

421849

APROM Technology College

Building

Kirikos /19

505175

Hulegeb Technical School

Building

Kirikos /18

157767

Hope Enterprise

Wood Work

Kolfe-Keraniyo

482534

Addis Ababa Technology & Business College

Drafting, Surveying

Kolfe-Keraniyo

_

HZ Technical College

Drafting

Arada /10

_

Addis Technical Institute

Building Construction

Arada

_

Entoto Technical & Vocational Training College

Wood Work, Surveying, Building, Road Construction, Drafting

Gulele

238765

Tegbareid Technical & Vocational Training College

Wood Work, Surveying, Building, Road Construction, Drafting

Lideta

515475

General Winget Technical & Vocational Training College

Wood Work, Surveying, Building, Road Construction, Drafting

Kolfe-Keraniyo

792250

Higher 12 JuniorTechnical  & Vocational Training Institute

Building, Drafting, Surveying, Wood Work

Yeka

140145/46

Higher  4 Medium Level Technical & Vocational Training Institute

Wood Work, Drafting

Lideta

763713/14

Higher 7 Medium Level Technical & Vocational Training Institute

Wood Work, Surveying, Drafting, Building, Road Construction

Addis Ketema

763806/08

Higher 20 Medium Level Technical & Vocational Training Institute

Building, Drafting, Surveying

Nefas-Silk Lafto

653805/06

Nefas-Silk Medium Level Technical & Vocational Training Institute

Building, Road Construction, Drafting, Surveying, Wood Work

Nefas-Silk Lafto

402171

Misrak Medium Level Technical & Vocational Training Institute

Building, Road Construction, Drafting Surveying, Wood Work

Yeka

181949

610392

Akaki Medium Level Technical & Vocational Training Institute

Wood Work, Surveying, Building, Road Construction, Drafting

Akaki Kaliti

342506

343335

 

 


 Supply Markets  [top]                                                                                                     


 

All Products com - Construction Machinery and Equipment

http://www.allproducts.com/search/categories/pC020303.shtml

 

Hardwares. Construction Machinery, Equipment & Supply Manufacturers and Suppliers

http://www.hardwares.globalsources.com/gsol/I/Construction-Machinery-
manufacturers/b/2000000011007/3000000153218/-1.htm

 

 


 Trade Fairs and Expositions  [top]                                                                              


 

Building and Construction
Trade Shows, Exhibitions, Fairs and Festivals, Conventions, Conferences and Seminars
Web Directory of Events, Products and Services

http://www.expocentral.com/construction/industry_building_and_construction.html

Biz Trade Shows - Building and Construction Sector

http://www.biztradeshows.com/building-construction/

A complete directory of all trade shows, fairs, events, expos and exhibitions on building and construction industry enables you to select the one most suited to your profile. Get the details of the building construction trade shows, its organizers and participants.

 

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