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The Addis Abeba City Council had its second regular
meeting on February 15 through 16, 2009, in the
attendance of all 138 members, including Mayor Kuma
Demeksa and Deputy Mayor Kefyalew Azeze as well as
other cabinet members.
The meeting was chaired by spokesperson Atsede
Assefa; her predecessor, Sinknesh Atele, attended as
an ordinary councilmember. Tarekgn Asfaw was elected
to president of the Tax Appeal Committee. The deputy
mayor was elected to chair the Mass Media Board,
while Sekuture Getachew, foreign public relations
department head at the Ethiopian People’s
Revolutionary Democratic Front (EPRDF) office, and
Frehiwot Ayalew, also from the EPRDF office, were
also elected onto the board, which has 10 members.
The meeting dealt with a host of issues, including
the six-month performance report from the mayor, the
supplementary budget, and a number of directives
that have been passed in recent weeks.
Consumers Association
The issue of the struggling consumer associations
that was established in response to the rampant
inflation was a concern of the council during its
meeting. Some associations were reported to have
already gone under while the rest are still under
continued dependence on the administration.
The associations were not seen to be much active
after they were established, according to some of
the participants. The problem was that they expected
the city to continue supporting them, which could
not happen because of the free and competitive field
provided for all, Shiferaw Kebede, head of the City
Trade and Industry Bureau, told the meeting.
“We are now facilitating for them to set up unions,”
Shiferaw said. “That will help them become strong
competitors in the market.”
A
hundred associations were formed in Addis Abeba
after Prime Minister Meles Zenawi called for them as
a means to weather the impacts of the severe
inflation, which was most significant on food items.
These associations have depended on the City
Administration for the provision of stores,
warehouses and other support, all of which it could
not meet.
With the formation of the unions, they will be able
import, buy directly from factories, and create
links with farmers’ associations and unions, which
will make them competitive, Shiferaw said.
Real Estate Blues
Mohammed Hussein Ali Al-Amoudi’s real estate company
could unconditionally lose the 36,000ht plot in the
centre of Piazza in the Arada District which it
started leasing 12 years ago for the construction of
a high-rise building if it fails to begin
development within three months from January 2010,
although Haile Assegdie, who heads a number of Al-Amoudi’s
companies, said that construction would begin in 15
days.
The company made the full payment for the land when
it leased it, however the site has remained fenced
all these years without much activity despite a city
directive which indicated that investors are to lose
their land if they do not start work within six
months. In January the city claimed responsibility
for the 12-year delay and allowed the company to
keep the land with a reminder that it had a
three-month deadline. One of the main problems
mentioned was that several cables buried underground
were not removed by the concerned government bodies.
“When we came to the administration, we tried to
understand the problem, but we could not find
organised information,” Mekuria Haile, Addis Abeba
City general manager said at the meeting. “We tried
to learn about the issue from people who worked in
the former administration, and yet we could not find
out any information.”
Haile, who is already heading a number of Al-Amoudi’s
companies, including Saudi Star Agricultural
Development and Derba MIDROC Cement Factory, was
assigned to oversee the commencement of the
construction of the high-rise building after the
city cleared Huda of any responsibility for the
delay and gave the company a three-month extension.
The work is to be undertaken by the MIDROC Project
Office.
The recent unexpected spell of rainy days has made
it difficult for the company to begin construction,
according to Haile, who said that preparations have
already been completed.
The council also entertained expressions of
disappointment over the performance of most real
estate companies which were said to have betrayed
their original intentions. The city has leased six
million hectares of land to 113 real estate
companies since 1998. The agreement between the city
and the real estate companies, according to Kuma,
was that 30pc of the buildings would be villas and
the rest condominiums, and that 70pc of all had to
be used for residential purposes.
“We expected that they would help solve the housing
problem in the city,” Kuma said during the meeting.
A
survey by his administration found that the share of
the private companies in the supply of housing was
only 14pc, which he said was not satisfactory. The
practices of the real estate companies violated the
administration’s directive, according to Kuma. The
offense was even worse, he said, because it was done
at the expense of the city’s limited resources.
“We shall take measures,” Kuma said. “We shall take
away the land and keep it with the Land Bank.”
These plots will be recorded at the bank as an
account, ready to be given away for investors as
they come.
A
meeting is expected with real estate developers over
the next four weeks. Among the issues to be
considered will be that of many investors who have
not started development and those who have made
foundations only.
“If we find that the problem is because of the city,
then we will facilitate for them to undertake the
work,” Mekuria said.
Where the fault is found on the companies, Mekuria
says that the administration will take measures.
Budgetary Pain and Gain
The Addis Abeba City Council approved a 628.7
million Br supplementary budget , out of which 620.7
million Br is for capital budgets and the rest for
recurrent expenditures.
The city’s budget for the year is 5.4 billion Br.
This money is to be progressively collected from
various revenue sources during the course of the
year. The supplementary budget is coming from
sources that were not included in the original
budget plan. Most of the money is already available
in the hands of city organs that have asked for
supplementary budgets, while the rest will come from
aid and public contributions.
The largest sum of the money, 118.9 million Br, goes
to the Land Development Bank. This sum came from the
original lease money paid to the city and from the
City Renovation Project Office and will be used to
compensate people relocated from their originally
leased plots. The Addis Abeba Environmental
Protection Authority has been granted the use of 1.3
million Br donated by Stuttgart University. The
money will be spent on improving climate change and
solid waste management.
Ethio-China Polytechnic College, Entoto Technical and Vocational
College, and the Centre for Evaluating and
Certifying Skill Performance have each been allowed
2.5 million Br, and Addis Alemayehu Memorial School
will have 165,000 Br, all of which has been
collected by the institutions themselves.
Last year the City Administration approved just five
million Birr as a supplementary budget. That year
the city also had some experiences regarding budget
planning. The officials chose to ignore the advice
of the budget planner from the caretaker
administration of Brehan Deressa that had preceded
Kuma’s administration. They were told that the
city’s maximum capacity was 5.6 billion Br, and they
went for 8.8 billion Br. Their actual experience was
a rude awakening. The administration was able to
raise only 4.4 billion Br.
“We tried to raise more money and failed,” said an
expert involved in budget planning at Brehane
Deressa’s administration. “We tried to advise the
new administration before we left office.”
The new administration chose to go its way instead
of heeding the advice.
Despite such problems, the council applauded the
city’s enhanced job performance since its business
process reengineering (BPR) which was initiated in
2008/09. The major problem cited would be none other
than financial constraints.
“Our capacity has been in a good position,” Kuma
told the meeting, “but we are restrained by a cash
shortage from performing at our maximum capacity.”
The Finance and Economic Development Bureau
estimates that the annual budget demand of the city
is 10 billion Br. Although, the city manager
estimated only 5.4 billion Br for the whole fiscal
year, and it fell short of the 2.8 billion it
planned to collect during the first half of the year
by 400 million Br, the meeting boasted that the city
had performed better than the previous year when the
shortfall was 800 million Br.
“It shows our improvement,” Kuma said.
The council admitted, however, that it thought the
city could not meet its targets without the
assistance of the Federal Government. The city
already applied for budgetary support, following
which the government allowed it to borrow from the
Commercial Bank of Ethiopia. The administration is
not optimistic about getting the kind of budget
support it wants from the Federal Government because
of similar problems at the federal level.
The city has a backlog of investments in road,
transportation, water and housing sectors.
Land Tenure Directive
The six-month-old restriction on the transfer of
land before the 100pc completion of construction for
which it was leased has been lifted.
The new directive not only allows the transfer of
plots with unfinished construction to a third party
but also enables people to get plans for plots they
already have so they can sell or exchange them. It
was in October 2009 that a letter signed by Kasim
Fete, head of the City Land Development and
Construction Permit Authority, instructed all
districts to stop all transfers of titles involving
plots with unfinished construction projects.
“We have discussed it during the two days of the
council meeting,” Mekuria told Fortune.
The preparation of the directive was underway for
the past 18 months. The rationale for the transfer
restriction which was removed by this directive,
according to city officials, was that some
investors, especially those who leased land through
negotiation, transferred land before they had done
much construction causing a hindrance to development
the administration expected to be undertaken on
those plots.
City Make Up
The council also came up with a shortcut to city
beautification, making institutions responsible for
their surroundings.
The strategy, which it to become practical within
two to three years, requires that both private and
public institutions be responsible for roundabouts
and road dividers in their environs. Any
constructions that will be undertaken will also be
done according to the design which the
administration will plan for them.
Earlier attempts to beautify the city by various
actors, notable among them Sileshi Demisse, a.k.a
Gash Abera Molla, who had started a cleaning and
beautifying initiative 10 years ago, had resulted in
activities that employed substandard materials,
according to Mekuria.
The focus will now be on road dividers and
roundabouts, which the city expects to be taken care
of by various institutions located nearby. The city
also plans to establish 16 parks and close the Repi
Landfill which has been in use for the past 40
years. A new landfill is planned in the Bole Aramsa
area in Dukem Town of the Oromia Special Zone.
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