9 March 2019

Ethiopia: Varnero Awaits Contract for Grand Addis Abeba Riverside Project

Anticipating the signing of a contractual agreement, Geom Luigi Varnero started mobilising for the construction of the 2.5- billion-Br park project that extends from Basha Wolde Chilot to Orma Garage near the Sheraton Addis Hotel, in Addis Abeba.

It is a one kilometre section part of a grand design to revitalise and develop banks and riversides on two rivers crisscrossing in Addis Abeba from Mount Entoto down to Qality. When completed in three years as planned, it will incorporate a total of 56Km and an estimated investment of 29 billion Br, according to city officials.

The Italian construction company was awarded a contract three weeks ago to develop a park that includes roads, playgrounds, sports fields, shops, bicycle paths, walkways and entertainment facilities. It was identified as a pilot project for there is no need to displace residents. The hill was cleared a couple of years ago and leased to companies owned by MIDROC-Ethiopia. The city administration reclaimedthe land a couple of months ago, as part of its drive to reclaim land where construction works have not been started for years.

Instead of leasing the plot for private development, officials at the city administration decided to turn one of the most prime locations in the city to greenery. In a highly publicised event, where Takele Uma, deputy mayor, attended, Varnero was awarded the project, but a contractual agreement remains unsigned with the River Basins & Green Areas Agency, the overseer of the project. However, the contractor started to fence off the construction site early last week and has begun to mobilise its equipment.

As the contractual agreement is required to go through a thorough review, the Agency needed to take more time in preparing the contract, according to Sileshi Degefa (PhD), CEO of the Agency. It is an agency recently formed under the city administration and delegated to oversee six bureaus, including the River & Riverside Development Project Office and Entoto Tourist Destination Development Project Office.

"We wanted the park not to be stalled as the case was with many other mega projects in the country," Sileshi told Fortune. "Thus, we are taking more time to prepare the [contract] document thoroughly."

Anticipating the signing of a contractual agreement, Geom Luigi Varnero started mobilising for the construction of the 2.5- billion-Br park project that extends from Basha Wolde Chilot to Orma Garage near the Sheraton Addis Hotel, in Addis Abeba.

The draft of the contract has been already finalised and sent for reviews to other bureaus such as the Addis Abeba City Roads Authority, managed by Moges Tibebu.

"They've asked us for standard documents, and we provide them with it," Moges, director general of the city's roads authority, confirmed to Fortune.

However, before being approved and signed, the contract needs to be sent to the Attorney General's Office for final review, according to Sileshi.

Being left in the dark about all the processes that are going on at the Agency, Varnero has been requesting updates from the Agency but without any success, according to sources familiar with the case. Its senior executives were alarmed by an incident on the site last week, where staff has faced a confrontation with a visiting Chinese contingent led by a person identified as Councillor from the Chinese Embassy. She brought over people from the China Urban Construction Design & Research Institute, sent by China International Development Cooperation Agency, according to people familiar with the process.

"They were on site for a feasibility study as part of their interest to finance the broader project," Sileshi told Fortune.

The Chinese are among a growing number of bodies eyeing the project from aboard. The Italians and Australians have also shown interest in financing the grand project stretching 56Km, and they have started discussions with the Mayor and the Prime Minister, Sileshi disclosed.

Prime Minister Abiy Ahmed (PhD) appeared to have developed a keen interest on the project since and instructed officials at the city administration to incorporate this particular project in the grand plan, according to people familiar to the background.

However, the park and the river bank that will be developed by Varnero covers a limited area from Basha Wolde Chilot to Orma Garage, is aimed at rehabilitating Bantyiketu River and its banks, mitigate flooding, erosion and promote a green economy. Slated for completion next year, the project was awarded to Varnero, after a restrictive bid among four other Chinese companies. Varnero placed an offer that was 1.4 billion Br lower than the second-lowest bidder.

The management of Varnero was not immediately available for comment for this story.

The company, a well-established construction firm behind the building of several landmarks in Addis Abeba, including the National Bank of Ethiopia, took the job to design and build. It has outsourced the design part to ZIAS Design International Plc, an architectural firm that partnered with Varnero in the building of the residence of the Prime Minister inside Menelik's Palace.

The firm is now expected to crystalise the project concept illustrated by animation design details.

Rehabilitating river banks is a project initially included in the city's master plan by the former Addis Abeba Planning Commission. During the Dergueregime, a group of architects also conducted a feasibility study on the project, which has undergone different processes with varying phases, area coverage and estimated cost. It was divided into two sections: Banteyiketu River, which stretches from Urma Garage to Afincho Ber, and Entoto Tourist Destination Development Project.

Under the two schemes, tendering processes were underway until it was suddenly terminated in October 2018. The cancelled tender had the Entoto project going to a company from Malaysia, HSS Consultancy; while China Communications Construction Company made the lowest offer of 605 million Br for the Urma Garage to Afincho Ber section.

"We've found design defects with the two projects," Sileshi told Fortune. "And terminated the projects and started developing a new design correcting shortcomings noted in the previous process."

Prime Minister Abiy Ahmed (PhD) appeared to have developed a keen interest on the project since and instructed officials at the city administration to incorporate this particular project in the grand plan, according to people familiar to the background.

Nonetheless, none of the budgetary institutions in the city was able to finance the project at the larger scale, according to Meskerem Tamiru, president of the Ethiopian Architects Association, who also advises Deputy Mayor Takele on the technical matters.

"Four months ago, following the initiative of the Prime Minister, discussions to develop a large scale project was started," Meskerem told Fortune.

The implementation of the entire project could lead to the relocation of over 10,000 residents, although the exact figure could be identified once the design is concluded, according to Seleshi. Despite the hill right in front of the Sheraton Addis appeared from a distance cleared off, a closer look reveals that there are residents sheltered in plastic makeshifts. They are reminders to Varnero managers and city officials that close to 600 households, of which 120 live in temporary tents, need to be relocated soon. Close to 117 have already received housing in public condos constructed in Bole Bulbula area, sources in the Agency disclosed.

Ethiopia

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