New Enterprise For Ethiopia’s First Express Road Under Formation

The administration of Prime Minister Hailemariam Desalegn has decided to create a state-owned agency to operate Ethiopia’s first expressway,  according to Fortune.

The 82Km Addis Abeba–Adama Toll Road is under construction by a Chinese contractor, and due to be completed soon after consuming a total investment of 16 billion Br. Former Prime Minister Meles Zenawi launched its construction in November 2010, heralding the government’s Growth & Transformation Plan (GTP).

The Export-Import (ExIm) Bank of China has advanced a 20-year, 350 million dollars, loan to finance the project and the remaining 43pc of the cost will be covered by the Ethiopian government. Beijing Expressway, a subsidiary of Beijing Enterprises Holdings, is the consultant on the project.

The road is scheduled to be inaugurated in May 2014, by Prime Minister Hailemariam, a senior government official in the Ministry of Transport confirmed to Fortune.

The road is the first toll way road for Ethiopia, requiring motorists pay a minimum of 50 Br upon entry of one of the 48 gates in seven stations, sources disclosed to Fortune. Nonetheless, a state-owned enterprise, which will manage the collection of these fees,would have to be established prior to April 2014, and the Council of Ministers will have to vote on the toll fee the public will be charged.

A bill for the establishment of the Enterprise, drafted by experts at the Ethiopian Roads Authority (ERA), was sent to Worqneh Gebeyehu, minister of Transport (MoT), in November 2013, according to an official at ERA, who declined to be identified due to the confidentiality of the matter. The Minister is preparing to table the bill to the Council of Ministers (CoM) for approval this month, Fortune has confirmed from senior officials at the Ministry.

The Enterprise, which will likely be named the Ethiopian Payable Roads Enterprise (EPRE), will be accountable to the Ministry, with an oversight of its operation by a board of directors. A general manager will head it, with three directors responsible for toll management, toll operation and engineering as well as human resources. The establishment of the Enterprise is estimated to cost 202 million Br, Fortune learnt.

The Administration is on headhunt to hire the general manager; and a staff member in the engineering department of ERA is the most likely candidate for the job, sources disclosed to Fortune.

The EPRE will have a total of 760 employees for a start, who will enjoy a monthly compensation of 15pc higher salary scale from what ERA pays its employees, according to those familiar with the bill. The minimum salary an employee would be paid is 760 Br, while the highest could be 16,000 Br, Fortune has learnt.

Three will be three teams under Toll Operations & Engineering Department: Engineering procurement and contact management; road safety and security; and electro mechanical management. However, this directorate has been a cause of contention between officials of the ERA and those at the Ministry.

“The ERA is claiming that the toll operation and engineering tasks should be left to it, as they are the ones making the road,” an official told Fortune.

If the proclamation and the organizational structure fail to be finalized in time before the opening of the road for operation, ERA will administer the road until the Enterprise gets established, said an official, although he expressed confidence that the Enterprise will be established in time. A senior official at the Ministry confirms his view.

The six-lane expressway, which has been under construction for the past three years, is now 82pc completed. Asphalting a section of the road at the entrance to Adama, building offices, traffic signs and lights are works that remain to be done.

The highway will cut down travel time between the two cities to 40 minutes from the current two hours. The toll amount to be has been under study for six months by a special committee at the Authority, according to a senior official at the ERA, who requested anonymity. Charging toll fees and controlling access to the road will both be done by machines. These will be procured and assembled by the contractor, the China Communications Construction Company (CCCC). The money that is collected from the tolls will be used for the maintenance of the road itself, said the official at ERA.

The road has eight tollbooths along with cameras, and will be equipped with lighting throughout the entire 80km stretch. Eight large bridges and 77 smaller ones are also part of the project.

The expressway starts from Tulu Dimtu, 2.8Km from Akaki, and links with Dukem, Bishoftu (Debre Zeit) and Modjo, before reaching Adama. Of the expressway’s tollgates, Addis Abeba and Adama each have one, while the others are to be located at six interchanges.

The current Addis Abeba-Adama road handles 19,000 to 20,000 vehicles daily, which is well above its capacity, according to transport officials. The new expressway can handle 15,000 vehicles comfortably, however, and could be upgraded to an eight-lane road if the need arose.

Source: Fortune