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Officials of the federal government are disappointed
with the delay in the launch of the new Tendaho
Sugar Factory construction project. Girma Birru,
minister of Trade and Industry (MoTI) has, two weeks
ago, instructed the project winner, Overseas
Infrastructure Alliance (India) Pvt Ltd Co (OIA), to
commence construction by May 15, 2008.
The minister issued the instruction following the
discussion he had with the management of the Tendaho
Sugar factory and the Ethiopian Sugar Development
Agency as well as executives of the OIA.
Overseas has delayed by three months. Tendaho Sugar
Factory and Overseas signed an Engineering,
Procurement and Construction (EPC) Contract on
January 20, 2008 and Oveseas should have begun
construction within 36 days of the agreement. The
company, however, has yet to begin the construction
of the factory in the Afar Regional State. The delay
following the agreement is also feared to make the
sugarcane harvest out of use.
“If the sugar cane is put idle after harvest for an
extended period, it will not be used for sugar
production,”
There is a 400ht of sugar cane plantation at Tendaho.
The agreement for the project was made to be for
engineering procurement and construction only as
there are two more winners of the various lots in
the tender that had been floated to also include the
Finchaa Sugar Factory Construction Project.The idea
to sign an EPC agreement came from the Indian EXIM
Bank, which financed 640 million dollars for the
Ethiopian sugar projects, including Tendaho.
The winners of the four lots were Overseas for juice
extraction and power house construction, IJAC for
stem generation, and UTTAM for processing house
installations.
To kick off construction, the company has to make a
deal with the two other companies that won single
lots each. The delay is attributed to a failure of
Overseas to agree with IJAC and UTTAM, sources
disclosed.
The federal government has budgeted 15 billion Br
for expansion of three sugar factories - Wonji-shoa,
Metehara and Finchaa - and the construction of the
new Tendaho Sugar Factory.
Tendaho, which cultivates 64,000ht of land, has been
allocated eight billion Birr of this budget.
Although Tendaho Sugar Factory was projected to be
finalized in 2010, the deficiency of water in the
incomplete Tendaho Dam during the dry season and the
protraction of the launch of the construction are
expected to delay completion by a year, a source
disclosed.
The Tendaho Dam, the largest dam constructed by the
Water Works Construction Enterprise (WWCE) has a
capacity to hold 1.8 billion cubic metres of water.
When completed, Tendaho Factory will have a capacity
to crush 26,000tn of sugar cane, the largest
capacity in Africa. When the projects in all the
sugar factories are finalized, Ethiopia will produce
800,000tns of sugar annually.
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