Ministry of Urban and Infrastructure Development develops legal framework
The Ministry of Urban and Infrastructure Development underscores that based on its mandate, it is working rigorously to prepare a legal framework to restrict import materials that can be produced locally.
As the Ministry tailored its 18.26 billion birr budget for the 2022/23 budget year, Chaltu Sani, Minister of Urban and Infrastructure Development stated, “The construction sector is in high challenging situations, especially with price hikes and project management and these have had a ripple effect on us.””
“In this new budget year, we are planning on new trends by reflecting on our last year’s performance,” said the Minister indicating that the ministry is focusing mainly on two issues, including properly facilitating project management and finding input materials.
“Based on our mandate through proclamation 1263/2021, we are preparing a legal framework to replace imported inputs that can locally be sourced in order to resolve the challenges related with input shortage,” said Chaltu, adding, “We are also working to support and strengthen the capacity of local producers.”
As experts opine, the prices of construction materials are heaping up from day to day. To this end, government has been taking a number of steps to improve the supply chain and increase the price of cement which is the main input for the construction sector.
Whilst speaking about the performance of the last budget year, the minister highlighted that rebuilding of the war affected areas were successful stories despite the interruption of construction due to certain reasons.
As she indicated, among the major projects the ministry had for the year, greenery projects were the main to spread in many cities of the country besides other old and usual construction projects.
On the flip side, the interruption of project completion, and unexpected time and cost overruns of housing and road construction projects, led to more than 768 federal government projects to be paused due to the price escalation of construction inputs during the previous ten months of the budget year.
Furthermore, the war in northern Ethiopia was cited as a critical reason for the interruption and delay of major federal road projects. Additionally, lack of clear directives for compensation and resettlement, price escalation, and absence of efficient contractors during the tender process to award project constructions, were mentioned as critical issues.
Construction delays more often than not occur due to the escalation in material prices, which contractors also underline as one of the major challenges they face in their projects.
Most of the stakeholders claim that there are few control measures taken by the government on the market, and they pin this as the main problem of the price spike.
The illegal increasing price of cement in the open market for the past several months has sparked challenges in the construction industry while cement producers on the other hand are tackling a long list of challenges including, unfavorable supply-demand balance, higher cement prices, escalating production costs, low utilization rates, social unrest, and a lack of foreign currency. With the new budget at hand, the Ministry is working towards providing a lasting solution for the development of the country, in all fronts.