PM Lays Cornerstone for Airport Without Approval, Budget

None of the usual preparatory groundwork has been done but the foundation stone for a new airport has been laid

May 18,2015
By DAWIT ENDESHAW
FORTUNE STAFF WRITER

Source  : Addis Fortune
Source : Addis Fortune

Despite no project and budget for the government to approve, and with a feasibility study yet to be conducted and site yet to be selected, Prime Minister Hailemariam Desalegn has nonetheless laid the cornerstone for an airport Nekemte town may have in the future.

The event took place on May 14, 2015 at a site which was used as an airstrip during the Italian invasion around 80 years ago.

The Ethiopian Airports Enterprise (EAE) has set the cornerstone for the Nekemte airport in Wollega, 328Km south of Addis Abeba without approval of the project from the Ministry of Finance and Economic Development (MoFED).

“We are compiling a document, which will soon be submitted to MoFED and it is up to the Ministry to approve the budget and its commencement time in accordance to the budget it has in its coffers,” said Tewodros Dawit, CEO of the Enterprise.

MoFED, which is responsible for the allocation and distribution of the national budget, has not yet approved the budget of the coming fiscal year.

Any project document, which is going to be submitted to the Ministry, has to have a feasibility study and source of finance, said Haji Ibsa, the ministry’s communications director. The mere fact that a cornerstone has been laid does not mean that the project is approved and will begin soon.

This is a government project and we do not have to make a study whether the project is profitable or not. It is not some shop opened by a merchant; this is a government project, Getachew Reda, special advisor of the prime minister, told Fortune.

The project is part of the second Growth & Transformation Plan (GTP II), with the enterprise planning to expand the number of airports across the country to 25 from the existing 2 airports. Out of the four, EAE has already launched the construction of four airports in Shire, Robe, Dambi Dollo and Hawassa with Nekemete added to the list.

The enterprise has already awarded the construction of three airports: Hawassa, Robe and Jinka to Yotek Construction Plc, Akir Construction Plc and Afro-Tsion Construction Plc for 457 million Br, 496 million Br and 571 million Br, respectively. These projects are part of the GTP II, which will begin this July. The enterprise is also upgrading the Shire airport at a cost of 417 million Br.

Moreover, the enterprise has also identified three potential sites for the construction of a new giant airport within 100km from Addis Abeba. The Enterprise is not disclosing the sites, but says that the new facility will be as big as Heathrow in England, which accommodates 17 million passengers per year.

In order to construct any airport, a detailed feasibility study has to be made on the profitability of the project, the demand, passenger traffic, the estimated cost of the project and the source of finance, said Zemedeneh Negatu, managing partner of transaction advisory at Ernst & Young. The location of the airport will be part of the study, he said.

“A detailed feasibility study of this specific project will be done in the future,” said Tewodros, adding, “a study was done at regional level which only showed the need of an airport in that area.”

This week alone, the government has laid the cornerstones for several projects ranging from a railway project in Ambo, to a steel melting factory in Wollega and anedible oil refinery factory in Sebeta. In addition, a number of road projects including those which were opened for traffic a year ago, have been inaugurated as new.

Source : Addis Fortune

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