In an effort to privilege the health industry in its land allocation decisions, the Addis Abeba City Caretakers Administration is planning to lease land to the health sector strictly through negotiations, according to Lease Board sources.

In order to take on its huge responsibility of responding to land demands from companies, private citizens, and government organisations, the Lease Board divides its allocations into four different methods; auction, negotiations, gift and zoned allotment.

But whatever the method, there is a serious backlog in the allocation of city land. After the City Caretakers Administration took over from the previous Administration on May 9, 2006, no decision was made regarding land issues until now. The new Lease Board suspended decisions while undertaking vast reshuffling throughout the Administration, replacing members of the previous Administration and city boards with new ones.

The Lease Board, responsible for allocating the land, depends on the findings and recommendations of the Administration’s Land Development and Administration Authority to make its decisions, a government body headed by Kassa Hailu, who is also one of the nine members of the Lease Board. 

“The need to encourage the health sector is to improve the level of health facilities and to help stop the need to go abroad for health services,” Kassa said, explaining the decision to privilege the health industry. The focus of the Lease Board will be on general hospitals, specialized hospitals, and high grade laboratories, he said.

Beyond health, the  Caretaker Administration has decided to lease land for six specific sectors: foreign investors, tenants of kebele and Rented Houses Agency who would like to develop their own land; requests from the Federal organisations, Embassies and International organizations; industrial plots more than 5,000sqm; and requests from non-governmental organisations . The leases for these plots of land will be decided by auction.

A new policy brought in by the new Administration is a strict requirement that bidders keep money in blocked accounts as a guarantee for the developers’ capacity to do promised construction work, which according to the administration, will keep land speculators out of the process.

Also according to new policies, land will not be leased for hotels which are less than three stars and for commercial real estate development. These developers always look for plots of land in the city centre, Administration officials complained, and the municipality has limited resources to handle the residents who get displaced.

Land to be auctioned will be handled through the districts. Negotiations, awards, and zoned allotment will be handled through the city’s Land Development and Administration Authority.

Six districts are to hold auctions to lease plots of land on October 11, 2006; 90pc of this distribution will be for residential houses. 

With this issuance of the Administration’s first land lease tender, districts have started to accept applications for residence, business, for industry and mixed purpose. Bidders will be able to see the plots both on site and on the paper plan.

One developer complained to Fortune about the Administration’s new policies.

“After a long wait of one year, the administration now requires us to keep money in blocked account as the guarantee,” he said. “The administration does not realize how much the rising cost of cement prohibits speedy construction in the country.”

The Lease Board anticipates earning around 800 million Br in the current fiscal year from land lease revenue.