The effort by the country’s utility monopoly, the Ethiopian Electric Power Corporation (EEPCo), to develop a source of electric power from coal deposits at Yayu, over 600Km west of Addis, in Oromia Regional State, will be hazardous to the environment if it is implemented as planned.

FICHTNER, a European consultant hired last December, submitted the first draft of its study on March 8, 2006, and said the Yayu coal mine “is not environmentally friendly”.

EEPCo wants to develop this reserve to an industrial level in order to generate 600mw power, significantly upgrading the 750mw power generation capacity it has now. The management was hoping that this could contribute to increasing its existing coverage of electricity from 15pc to 50pc in five years.

Yayu is just one of the multiple projects the Corporation is undertaking to meet its target. The reserve, which is believed to contain 100 million tonnes, was first discovered 10 years ago when the government was interested in erecting a fertilizer manufacturing plant.

A Chinese company, COMPLANT, conducted an environmental impact assessment that warranted the setting up of projects in the area, known to be a dense forest part of the country and where coffee grows wild. The price of UREA at the time, which was less than the cost per tonne estimated from the plant, discouraged any effort by the government to pursue its plan.

The project was terminated in 1997 and the site transferred to EEPCo, which established an office under the Yayu Coal Mine and Coal Fired Thermal Power Plant Complex. It wanted to review the impact assessment conducted by the Chinese company and hired FICHTNER for 1.3 million Br.

The new consultant sent two of its experts in January to the site, together with two of the Corporation’s staff. They produced 17 volumes each with 35 pages. Five other experts of FICHTNER reviewed these reports before they were submitted to the management of EEPCo.

Says the draft report: “After a careful review of existing studies with respect to the chosen technology and design and baseline conditions, FICHTNER comes to the conclusion that the Yayu coal mine is currently not environmentally friendly.”

An official from the Environmental Protection Unit Planning Department of EEPCo confirmed that the draft study has made it to their desk.

“We are going through it, so we are unable to comment now,” said the official.

The review, however, claims that the impact assessment conducted by the Chinese firm overlooked several factors in the study, including a health and safety assessment, a socio-economic survey, investigation of the fauna as well as an environmental audit compliance. It also discovered that the Chinese firm had failed to produce a land use plan and had not indicated how the ash from the burned coal could be removed.

Representatives for the Chinese firm were not available for comment.

Now the price of UREA has shot up in the world market, COMPLANT has been awarded a 12 million Br contract to start a fresh study on how to resurrect the government’s plan to set up a fertilizer manufacturing plant in the same area. Its managers signed a contract with officials of Coal Phosphate Fertilizer Complex Project Office, which is under the Ministry of Trade and Industry, just last week.

FICHTNER’s new study is a major setback to EEPCo’s plan to build a generator at a cost of half a billion dollars. Its tender to hire a consultant that would do engineering and procurement was opened last October. Three joint ventures had responded: the Americans Kuljian together with Mariston & Mariston, FICHTNER with International Mining Consultants, and Lahmeier with the Dutch Mining Technology (DMT).

Sources disclosed to Fortune that EEPCo has awarded this contract to Lahmeier and DMT and signed a contract on February 3, 2005. Corporation officials deny the existence of such agreement.

“It is utterly erroneous that they have signed this agreement,” said an expert from the federal Environmental Protection Authority.

He argues no project should be implemented in and around Yayu before the impact of projects on its rich wilderness is fully discovered.

FICHTNER is expected to send a university professor and head of the project office for the study to deliver their presentation to the management of EEPCo and its staff involved in the project. According to sources, they are scheduled to stay in Ethiopia from March 27 to 31, 2006. The final report by FICHTNER is due on April 4.