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Compensation scheme, the new area of concern of corruption PDF Print E-mail
By Elias Gebreselassie   
Tuesday, 05 February 2013 06:35

The issue of compensation for government mega projects is a highly sensitive and contentious subject for many of Ethiopia’s urban as well as rural residents.
Article 40 sub-article 3 Constitution of the Federal Republic of Ethiopia (FDRE) states that land is  an inviolable property of the Ethiopian government and its nations and nationalities.
While sub-article 8 states that, notwithstanding the right of private ownership, the government can acquire land on private property in the interests of the public if it pays fair compensation prior to acquisition.   
However, a workshop held by the Federal Ethics and Anti-Corruption Commission (FEACC) on January 31, revealed that government agencies have a difficult time resolving this issue.
Currently, there are 700 billion birr’s worth of mega projects being undertaken by the Ethiopian government, with an estimated average of 15 percent of their budget being earmarked for compensation purposes. These projects include road construction, rail network, housing development, sugar development and energy provision.
Others include fertilizer factory development, water development programs, cobblestone and urban infrastructure projects.
Birhanu Assefa, Education and Public relations Directorate director at the FEACC, said the view on compensation schemes is skewed and that these schemes are construed as ways of getting benefits instead of being seen as reimbursement systems.
He further said compensation schemes have been riddled with problems such as inconveniences with redevelopment and relocation moves and the relative multiplicity of people and institutions involved in compensation schemes.
Other reasons mentioned were the lack of transparency and uniformity in work procedures, failure to free land for which compensation has been paid and lack of coordination.
Sugar Corporation still doesn’t have a compensation implementation directive
The FEACC says big government enterprises such as the Ethiopian Roads Authority (ERA) and the Ethiopian Railway Corporation (ERC) have enacted directives regarding modalities of compensation.
However, one notable exception so far is the recently-formed Ethiopian Sugar Corporation, which is still in the process of enacting a directive regarding its own version of compensation scheme.
The Ethiopian Sugar Corporation is in the midst of undertaking several large scale sugar projects around Ethiopia. These projects will utilize thousands of hectares of land and possibly will displace thousands of people.
The Federal government, which has been given the right to enact laws regarding purpose of usage of land, has enacted a proclamation on the ways and means of displacement and compensation scheme for land that has been taken over for the benefits of the public.
Regions that have enacted directives based on the proclamation are the Amhara, Tigray, Oromia regional states and the Addis Ababa city Administration.
ERA spending more on compensation than it originally budgeted 
The fact that government enterprises have enacted directives on modalities of compensation didn’t insulate them from overspending, with ERA being a case in point.
The Authority’s data shows that of the seven years gathered data, ending during the last Ethiopian Fiscal Year 2011/12, it had gone over the budgeted compensation in six of those years; in other words, they had overspent.  
Birhanu said that although the data at first look  doesn’t show embezzlement and corruption, it’s clear that there are problems with the figures. 
The FEACC said one area it can have a relatively smooth start and avoid the past mistakes of compensation schemes is that of railway projects, which are just starting.
Ethiopia plans to construct more than 5000km of railway networks in eight strategic economic corridors.
These are the Addis Ababa-Djibouti corridor, Addis Ababa -Moyale Corridor, Sebeta-Ijaji- Boma corridor, Ijaji- Wollega- Assosa- Kurmuk corridor and the Adama -Ginir Corridor.
Others are the Awash Sebat-Aksum- Shire Endaselassie Corridor, Finote Selam- Woreat- Elidar corridor and the Woreta- Azzezo- Metema corridor.
Tekezze: a showcase of a corrupted compensation scheme
The workshop also witnessed a document presented on a corrupted compensation scheme for the 300 Mega Watts Tekezze river Hydro electric power project.
The project, inaugurated in November 2009 under the auspices of the Ministry of Water and Energy (MoWE), had taken over an area of 210 square kilometres.
One of those areas that had been taken over was the Abergale woreda in Wag Himra Zone of the Amhara Regional state.
The report showed how three individuals, who had previously occupied various positions in the Abergale woreda’s administration, paid unlawful compensation to a total of 89 individuals, totalling 4,815,305 birr.
Methods used in the unlawful payment were falsely stating possession of plots of land, putting on the list for compensation deceased people and children, and falsely assigning legal credence to those that have been deemed to have settled on the land illegally.
Birhanu stated that malpractices in compensation schemes on government projects have a range of economic, political and social consequences.
These include wastage of public and governmental resources, erosion of the right of ownership among the public, declining investment, promotion of rent-seeking attitude, disrespect for the law, corrosion of trust between the public and the government and erosion of good governance.
Solutions mentioned in the workshop were ensuring justice, strengthening the supervisory system, changing unhelpful attitudes and laying out a strong system based on information.
Ali Suleiman, commissioner of FEACC, stressed that the various investment and infrastructure projects can go ahead according to plan if action is taken collectively and with coordination to root out malpractices in such situations.


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