So talk of the town has it that Ermias Amelga is back in town alive and kicking. It is indeed great news to thousands of home buyers who were left in the dark for the past several months. At least they will have someone whom they can forward their inquiry.
The home buyers were forming different solution seeking committees with a view of getting what they deserve, what they paid for, what they were hoping for. These people paid billions of birr in cash but were left empty-handed in return.
To begin with, Access Real Estate Share Company signed a two billion birr deal with a Dubai-based firm Soliton Holding Limited, which will see its first investment in an African country.
The initial agreement framework was for Soliton to provide project management and other technical resources to support Access’ existing lined up development projects with mid-term supplementary construction capacity to be brought in. However, this partnership failed without going further.
Moreover, camouflaged problems broke to the surface when the company went straight down to the bog and eventually collapsed.
Then things start to come up bit by bit. The Addis Ababa City Administration Land Development and Management Office started an investigation to look into the way Access Real Estate had acquired various plots of land around the city for the construction of housing units. The city administration also confirmed that so far not one plot of land owned by Access was acquired from the relevant municipality body. Yet, the giant real estate company offered to customers to erect various standards of housing units on different sites around the city, while accepting advance payments and in some cases full payment.
So my question is, how is it going to work out if Ermias is back and starts his job afresh? What will the new episode be like? My other question is that there are many companies that went bankrupt in the past many years. The supposed owners or board chairmen fled the country to avoid prosecution or for fear of their life.
One good example is Holland Car. Holland Car, a pioneer in assembling a large number of automobiles in Ethiopia, has declared bankruptcy after its founder and general manager, Tadesse Tessema, left the country for the Netherlands, without delivering vehicles to over 100 buyers who have paid in advance.
Why could not Tadesse return to his country? Why is he treated differently than others? We can go on and on with lists of similar cases.
Calamity of Ermias’ company had dominated news headlines, following its severe liquidity shortage and the eventual departure of its chief executive officer to Dubai, United Arab Emirates. Over 2,000 home buyers, most of whom had already made a 100 percent down payment were asking for an intervention from the government or other relevant bodies. After Ermias’ self-exile, the real estate market has remained in turmoil, forcing a response from various government bodies including Prime Minister Hailemariam Desalegn.
The government announced that it has set up a special committee to workout solutions to the problems Access Real Estate had set off. A legal representative of Ermias met with the governmental committee to negotiate the conditions under which the CEO and former board chairman of Access Real Estate can return. The main committee, chaired by Mekuria Haile, Minister of Urban Development, Housing and Construction (MoUDHC) was established in July 2014 to address the problems of those affected by Access’ breakdown in three phases.
These are good steps the government took to stabilize the real estate market in the country.
Oh! I almost forgot, actually almost all the real estate companies in the country have never delivered a single house in accordance to their agreement. This is a known fact. So we should not blame Ermias alone, we should blame all of them. In fact, Ermias agreed with some of the real estate developers to use their land for Access’ real estate venture.
So going back to what we started, the government, I think should really think about it while making such kind of decision. Other cases might pop up now and then following suit.