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The Caretaker Administration has advised the newly
installed City Administration to help the City
Housing Project Office be able to finance the
condominium constructions it undertakes. The Cabinet
is expected to discuss the proposal that recommends
the city dolls out seed money to the agency,
together with the bond it sells to the Commercial
Bank of Ethiopia (CBE).
Thus, the constructions of the following year would
be financed by the proceeds collected from house
buyers.
“This experience that we are advising the new
administration to adopt has been found effective in
the Oromia Regional State,” a former city official
told Fortune.
Condominium constructions are being run on a budget
allocated from the City Administration. Moreover,
the constructions have been financed by a one
billion Birr bond sales to the CBE.
Allocating budget for the Project Office has been a
daunting task for the administration, which could
not secure the proceeds it had set out to earn due
to the delay in constructions.
In 2005/2006, the constructions of 30,719
condominiums were launched but the construction of
21,125 houses had still not been completed in the
current budget year. Although, there was a plan to
finalize 19,361 houses in the first six months of
the budget year, only 35pc were finalized.
The Caretaker Administration also had planned to
construct 33,000 houses in 2006/2007. So far, it is
only the clearing of the ground and designing that
was undertaken. The same goes for the current budget
year; although there was a plan to construct 38,500
houses, none have so far been built.
Tsedale Mammo, head of
the Project Office, had told journalists two weeks
ago that the delay was due to the shortage of
construction materials and lack of finance.
“In the last 10 months, the supply of cement and
gravel was only 66pc and 45pc of what we needed.
Moreover, only 75pc of the finance required was
available,” she said.
The city approved a 6.5 billion Br budget for the
current fiscal year, but faced a 2.5 billion Br
deficit after failing to earn what it had planned to
get from housing and land transfers.
“There should not be new construction plans next
year. It is rather preferable to begin the
construction of the already planned condos,” said a
former city official. “There are financial
challenges.”
The new cabinet is expected to deliberate on the
proposal after two weeks, having first held
discussions with residents of the city about it.
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