Ethiopian Business Review

A Peek to Ethiopia's Landmark Project

Grand Ethiopian Renaissance Dam

Eight years ago, when Ethiopia announced its bold decision to build the biggest possible dam on the Nile River, to which it contributes 86Pct of the water volume, with financing from domestic resources, the issue grabbed global headlines. Despite considerable consternation in Egypt and Sudan, the country was able to embark on the Grand Ethiopian Renaissance Dam (GERD), which will be the largest hydropower plant in Africa, and the seventh globally upon completion.

Seven years later, however, the Metal and Engineering Corporation (MetEC), the contractor for the electromechanical and hydraulic steel structure work on the project, became a focus of controversy amid allegations of delay, corruption, resource wastage and all sorts of mismanagement. The controversies have since put the GERD on the spotlight; and many even doubted the completion of the project. This was further complicated with the untimely death of Simengew Beleke (Eng.), manager of the project who was found dead of a gunshot wound on July 26, 2018, at Meskel Square, Addis Ababa.

Last year, the government cancelled all the contracts awarded to MetEC and signed contracts with five Chinese, French, and German companies to undertake the electro mechanical works. With this, the government seeks to start the project with a fresh schedule and finish the project in 2022, six years after its initially planned year of completion. However, there are still uncertainties over the finalization of the grand project. EBR’s Ashenafi Endale, who visited the game-changing power project, reports.

When the Ethiopian bombardier airplane landed at Assosa Airport in the afternoon of July 2, 2019, the temperature of the town was 22 degree Celsius while the sky was a bit cloudy. Few shuttle drivers scrambled to take the travelers to their hotels, most of which are located five kilometers away from the airport at the seat of the state of Benishangul Gumuz. The construction of the Grand Ethiopian Renaissance Dam (GERD) in Guba woreda, 205 kilometers from Asosa in the same state, has hugely benefited the town by contributing to an influx of visitors. Lately, however, business has not been as usual due to the decline in the number of tourists who visit the GERD.

“Businesses dependent on tourist flows have been severely affected because the visitors have sharply dropped in the past couple of months,” says Yared Asmamaw, a driver of Bamboo Hotel, one of the businesses in the town which have been severely affected. “For instance, the airline used to fly twice daily from Addis Ababa. But currently, it only flies twice a week. The decline in frequency of air travel to the town is attributed to the considerable slowdown of the construction of the dam in the past two years.”

The GERD has been the main driver of business activities in Asosa, home to a little over to 80,000 residents. Though there is an airfield near the dam for small aircrafts that transport officials, visitors are required to drive from Asosa to the dam. Majority of the land in the region is flat lowland covered with dense forest, and is home to various wild animals. The bunch of mountains around the dam allows visitors to have a wide aerial view of the project. On both sides of the gravel road from Asosa to the dam, travelers will notice the proliferation of small villages, barely struggling to transform themselves into small towns.

The residents, who relocated to these sites recently to give way to the dam, belong to the Berta and Gumuz tribes, two of the main communities in the state. About 20,000 people were compensated and relocated by the government, thus leaving their homeland for the huge project. Many of them used to live on the project area where the reservoir lake is set to rest.

As vast arable land is vacant and agriculture is less known in the area, only few of the residents are trying to cultivate maize. In fact, they have to first clear the forest to engage in agriculture. That is how some of the relocated people have started to practice semi agriculture by cutting and partially burning the dense forest in the area. However, they barely look to adapt to their new lifestyle. Before they were relocated, the livelihood of the community was strongly dependent on hunting, gathering of wild fruits, honey, firewood, and fishing on the Blue Nile. 

Since education hasn’t expanded into that part of the country very well, most of the people are not schooled. This, together with the less sedentary life style they adopted, has reduced their ability and interest to take up opportunities of employment at the dam or other emerging urban areas in the state.

Studies conducted by international organizations and scholars indicate that mega projects in Ethiopia are not well accepted among indigenous communities because of the top-down strategy often followed by the government. The projects affect the natural ecosystem in the areas and indigenous communities. However, these realities are common in many countries that embark on similar development projects. Constructed in the 1950s, Egypt’s Aswan high dam, for instance, relocated over 100,000 people. However, the dam has increased employment opportunities in the area and hugely boosted Egypt’s economy as the increased electricity production improved the manufacturing sector. Such benefits enabled Aswan to return the one billion dollar project cost in two years. The dam also improved agricultural productivity as irrigation and fishing were dramatically enhanced. However, the dam is also criticized for inducing soil salinity and water loss due to evaporation.

By the same token the construction of the GERD has affected tens of thousands of people in Benishangul. However, it has a very good acceptance amongst local communities. “The dam is my identity. Whenever I see it, it makes me proud of being an Ethiopian,” says, Aden Hamid, a member of GERD’s standby security team along with members of the national defense force, federal police, and a standby taskforce comprised of the regional state’s police commission.
Tied between two medium-sized mountains on its right and left sides, GERD, the biggest dam built on the Nile River even bigger than Sudan’s Meroe and Egypt’s Aswan high dams, is indeed a landmark civilization. Considering the rouged terrain and long and difficult route that the Blue Nile, one of the two major tributaries of the Nile River  originating from the Lake Tana goes, the surveyors and engineers who found the ideal location for the Dam deserves a big respect and appreciation. But that is not also free from flaws.

One of the problems that stem from the location of the dam, however, is the difficulty it poses to use the water from the dam for irrigation purposes, according to Alemu Weyeso, Water Resources and Irrigation Engineering Lecturer at Asosa University. “Because of this, installing irrigation infrastructure from the reservoir becomes unthinkable. Besides, the flat land where agriculture can be developed is a little far away from the dam. But for fishing and tourism, the reservoir water is ideal.” 

Furthermore, the fertile soil at Guba, where the dam is located, seeps the water to the earth because of the type of soil in the area. The rocky soil in the Abay gorge, another possible location for a similar large dam as some water engineers foresee. Some even argue that the area on which the reservoir rests needs to be concrete, but this will further escalate the cost of the project. The site for the dam was identified by the United States Bureau of Reclamation during a Blue Nile survey conducted between 1956 and 1964.

Planned to be finalized in five years at a cost of USD4.8 billion, equivalent to ETB80 billion at the time of commencement, the project has now passed its eighth year. Official records show that ETB98 billion birr cost has been incurred, even though the project is only 67Pct complete. 

The project commenced on April 2, 2011, even though it has been planned since the 1960s when a group of experts from the United States came to Ethiopia to help the imperial regime build a major dam on the Blue Nile in response for the Soviet Union’s support for Egypt in building the Aswan High Dam at the time.

The dam will produce 6,450MW of electricity, higher than the total power generated in the country at the moment, which stands at 4,244MW. The country has made significant strides in improving national power production capacity in the past twenty five years. It invested a large amount of loans and locally-generated resources in the sector and managed to increase production capacity by more than tenfold compared with the total energy production in 1991, which was below 400MW.

Although GERD’s total installed capacity with all turbine-generators was initially 5,250 MW, it was upgraded twice with design changes to produce 6,000MW then 6,450MW.  But Asfaw Beyene (Prof), Renewable Energy and Energy Efficiency Director at San Diego State University, in the United States, argues that the actual production will depend on the flow rate volume of the the river, turbine efficiency, height of the dam and other design factors.

With three years of delay already accrued, the construction of the dam has only reached 67Pct completion. A year ago, the figure was reported to be 65Pct. As the country has been undergoing huge political crises and changes in the past two years, the construction of the dam has shown a significant slowdown.

Though the civil work has progressed, including finalization of the right and left power banks, only 25Pct of the electromechanical work is completed. The figure might even be lower as much of the work done by the state owned Metals and Engineering Corporation (MetEC), the initial contractor of the project, is not yet installed. Additionally, the clearing of the forest where the water will rest, is also yet to be finalized. Although there was a plan to clear 123,000 hectares of forest, only 39,000 hectares has been cleared so far.

Nonetheless, the full payment to clear the forest has already been paid to MetEC, whose contract was terminated by the administration of Prime Minister Abiy Ahmed (PhD) last January. Following that, Ethiopian Electric Power (EEP), project owner, signed two agreements worth USD200 million to revive and overhaul the hydraulic steel structures and electromechanical works that MetEC used to handle to a German based Voith Hydro Shanghai for electrical, mechanical, and various civil and structural works required to finish the GERD. Another Chinese company, Power China, the mother company of Sinohydro, was also awarded a project to finalize the steel structure construction by the end of June, 2020. Commissioning of the entire project will be done by the end of 2022.  Until these decisions were made, the progress of the construction was stalled for more than half a year.

Since the project commenced, contracts with subcontractors have been amended twice, contributing to the overall delay of the construction. According to Efrem Woldekidan, Deputy General Manager of the GERD, concerns over the quality of installed equipment have also greatly contributed to the project’s delay. “We are now correcting the construction flaws of MetEC,” he told EBR. “Most of the electromechanical and hydraulic works were not started, whilst the materials installed by the corporation are defective and have dimensional problems.” The inability of MetEC to deliver its commitment and catch up with the fast progressing civil works compelled the government to pay an extra USD372 million compensation to Salini Impregilo, the Italian contractor which was awarded the construction of the project without competitive bidding in April 2011. Because of MetEC’s delayed work, Salini had been idle for two years.

The construction slowdown is not the only impact induced by the former contractor. The amount of fund collected from the public also declined especially after the state-owned broadcaster, Ethiopian Broadcasting Corporation (EBC), aired a documentary exposing the corruption, resource wastages and many more aspects of mismanagement by MetEC, the military-industrial complex.

“We used to collect a minimum of ETB100 million from the public monthly. However, that figure dramatically dropped to ETB52 million the next month after the airing of the documentary about MetEC,” explains Hailu Abrham, media and communications director at the Office of National Council for the Coordination of Public Participation on the Construction of the GERD. “During the first ten months of 2018/19, ETB860 million was collected from the public, which is 16.2Pct lower than the fund collected in the same period last year.”

However, even though the dam underwent many problems and construction slowed down significantly, its employees demonstrate a great deal of motivation. “GERD is a special project which bears the signs and seals of every Ethiopian. That is why we always work with high spirit, even under the hottest temperature, and distance from our beloved families and social connections.” says Serkalem Alemu, a technician at the engineering department at the dam.

Despite such optimism, the number of employees of the dam keeps declining in recent years. Currently, the GERD has about 5,000 employees, about half the number it used to employ before the construction slowdown started.

To speed up the construction further, seven contracts, all of them snatched from MetEC, have been awarded to five foreign companies. These companies know much of the details of the work because some of them were formerly subcontractors under MetEC.

Under the amendment of their contracts with Ethiopian Electric Power, they now supply, install, test and commission the electromechanical and hydraulic works. Installation of turbines and generators for the rightside power bank has been given for General Electric Hydro France, an engine and turbine manufacturing company. They will manufacture, fix and test turbine generators for five power generating units, including the two turbines that were designed to generate power ahead of the full completion of the project.

A similar agreement has also been concluded with Sinohydro, a Chinese state-owned hydropower engineering and construction company, to speed up civil construction work of the dam. A memorandum of understanding was also signed with China Gezhouba Group, a company which had a sub-contracting agreement with MetEC, to continue its work at the dam.

Balance of plant, which enables the whole dam system to run, including installing control system, protection and other systems, is also awarded for Voith, under a new contract. The work under this part was not started by MetEC, which still has stakes in the civil work.

The work of the hydraulic steel structure, including waterway preparing, diversion convertion and outlet bottoming, is given to the Chinese company CGGC. MetEC started part of this work but CGGC is scheduled to do it afresh. CGGC is tasked with finalizing turbine unit nine and ten by the end of 2020. These units are planned to start power generation next year.

Filling the 74 billion cubic meter reservoir, which is 1.5 times the annual water volume of Nile River, will take a minimum of five years, while completing the construction of the dam is estimated to take up a minimum of seven years. “The biggest challenge we expect is coordinating the works of the five new contractors and integrating their schedule alignment and leading to the main final target of the project,” says Efrem.

The civil and electromechanical work is scheduled to be finalized by the end of 2022, while early power generation is hoped to commence by the end of 2020. However, this does not seem feasible for many. “It is difficult and complicated to determine the exact time for the completion of the project. It might range from 2022 to 2024. It depends on the coordination efficiency between the seven contractors,” explains Azegrig Olia, a Georgian who joined the project seven months ago.

Roberto Meneghini, an Italian Chief Resident Engineer at the dam, has a similar concern. “Everybody is asking for the exact completion date of the project. But the biggest thing is keeping the work progressing and producing the first kilo watt. It is already a very big achievement for the government to resume the work under new contracts within eight months after the previous contracts became null,” argues Meneghini.

Another concern around the dam is the ongoing dispute between Ethiopia, Egypt and Sudan over the sharing of the Nile waters, which remains at a deadlock. Following the transition of leadership in April 2018 in Ethiopia, Prime Minister Abiy Ahmed (PhD) eased tensions between Cairo and Addis Ababa by making a two day visit to Egypt in June 2019. In a joint press conference with Egyptian President Abdel Fattah al-Sisi, the Premier said “my government and my people have no intention to harm the people and government of Egypt.”

But the three parties have made little headway in resolving the disputes further as Ethiopia and Sudan have especially been caught busy with local issues in recent times. While Egypt fears that the dam will drastically reduce the water flow and thus endanger its national interest. Ethiopia and Sudan assert that the dam will improve the water volume, by regulating its flow throughout the year. This reduces risks of flooding and enables full year irrigation for downstream countries as the river flow will not substantially decline in the dry seasons. Of course, they also affirm their right to exploit the Nile waters to further develop their economies. “There are ongoing negotiations especially on the impoundment and water contending as it is important when we start filling the dam. But the negotiation is still pending,” says Efrem.

Hailu, on the other hand, argues that the fact that the dam is now independent from internal politics, the construction will progress faster. “The previous administration has been using the dam as a political tool. While informing the general public that the dam was performing well, it was indeed keeping many failures and defects as a secret, recalls Hailu. “Nobody will sabotage it now.”


8th Year • July.16 - Aug.15 2019 • No. 76


 

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