French Development Agency suspended loan for the project
The 19.2km long Bus Rapid Transit Lane (BRT) project’s fate remains unclear as disagreements with the contractor of the project caused foreign loan disbursements to stop.
Officials in the Addis Ababa City Administration are pondering the continuation of a 5.9 billion birr Bus Rapid Transit Lane (BRT) project, which began in June 2020 under the administration of former Deputy Mayor, Takele Uma (Eng.).
Razel-Bec, a French contractor, was first tasked with carrying out the construction, but its disagreement with authorities led to the termination of the project later. This has resulted in a freeze in loan disbursement by the French Development Agency, which, according to the agreement, is only required to do so until a contractor is on the job, a source at the City Administration told The Reporter.
The BRT project started with a total budget of 5.9 billion birr, with the French government covering 45 percent of the cost, EUR 42 million, and the City Administration covering the remaining.
The Bus Corridor, starting from Winget to Jemo 2, which covers five sub-cities, was supposed to alleviate traffic jams by constructing a lane dedicated to buses. The project’s cost includes the purchase of buses, as well as the construction of intersections, the installation of 23 bus stations and facilities for vehicles, cyclists, and pedestrians.
According to the source, the French contractor was unwilling to continue the project due to disagreements over payment increments and other minor issues.
“The French government did not disburse the fund, because the contractor left the contract at an early stage of the disbursement process,” the source said.
“The issue with the lending country is also related to the current situation in the country. When you are strong, you will be backed. But when things are as they are now, issues like this happen,” said the source, linking the freeze of the loan with the war in Northern Ethiopia, which is said to be the cause for the fall in foreign aid.
Even if Razel-Bec terminates its contract, the Addis Ababa City Roads Authority has taken on the construction of the bus corridor with its own budget. However, it has only covered 3.5 km of the total 19.2 km and is awaiting the city administration’s decision on whether it will continue the project or another contractor will be selected, since the issue is beyond the authority’s mandate.
The BRT project is not the only road project that is waiting for the city administration’s decisions in relation to the freeze on the loan. The Kality to Tulu Dimtu, a 10 km road project, which kicked-off four years ago with a loan granted from the Export Import Bank of China, is also waiting for the administration’s decision, after delay of the payment to the contractor caused an issue.
“If there is a way that will allow us to keep the fund from continuing, it will be looked at. If not, other options are needed,” the source said, adding, “Waiting for the disbursement should not be mandatory to continue the project; in the end, we are the owners of the development.”
