New mega public enterprise projects are behind schedule and some even have been slashed out.
In a report presented to the parliament’s public enterprises standing committee, the Ministry of Public Enterprise discussed problems they face especially in sugar and fertilizer projects.
The construction of a fertilizer factory, overseen by the Metal and Engineering Corporation (MetEC) at Yayu, Ilu-Aba Bora was supposed to only take a couple years, but that was over five years ago.
The China National Complete Plant Import Export Corporation in 2006 and stated the fertilizer factory would take four years to build. However MetEC revised their study and said they could finish within two years, according the repot of the Office of Federal Auditor General (OFAG), now, however, only 43 percent has been completed.
The Auditor General report stated that the corporation has already received 5.6 billion birr for the project, which is 60 percent of the total cost.
In May 2017 the Commercial Bank of Ethiopia, financer of the project, requested the corporation to settle 372 million birr loan. Through the involvement of MoPE the period was extended for three years.
The bank interest has also escalated due to the delay of the fertilizer project in Yayu, according to the OFAG report. The Chemical Corporation told the public enterprise standing committee of the parliament that the total bank interest through the end of the budget year will be over two billion birr.
One problem apparently occurred due to a natural disaster.
Endawok Habte, Chief Executive Officer of the Ethiopian Sugar Corporation, explained that there have also been problems with the sugar projects.
Beles II and Tendaho II have been stopped for now, according to Endawok.
Twenty seven percent of Tendaho and 25 percent of Beles II have been completed. A year ago the government canceled Beles III and one of the five Kuraz sugar projects.
In the budget year, MoPE targeted to cover 100 percent of sugar consumption of the local market from these sugar factories. But now the ministry has revised its plan and targeted to import up to 50,000 tons of sugar in this rainy season. A year ago the country imported 300,000 tons of sugar.
The government has also targeted to amass massive hard currency from sugar export in the first five year plan that ended in 2015. To achieve these ten projects has been launched by the government. However the actual achievement is almost nil.
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