The Yayu fertilizer project is gradually moving forward, achieving 85% completion after enduring a five-year delay due to difficulties with the original contractor, Metal and Engineering Corporation (MetEC).
Project Handover
Initially awarded to MetEC in 2012, the Yayu project faced substantial alterations following political transitions in April 2018, resulting in the division of MetEC into two entities: a commercial and a military wing. Ethio-Engineering Group (EEG), the newly established commercial arm of MetEC, was tasked with overseeing the project transfer to the Chemical Industry Corporation (CIC), a state-owned enterprise that owns Yayu. The process, however, was fraught with complications and inherited issues from MetEC, delaying the project further.
Moving Forward
Recently, EEG has managed to transfer 85% of the project to CIC, with experts from both entities working collaboratively to ensure a smooth handover. The remaining concerns include the retrieval of 25 containers filled with structural steel and resolving outstanding payments and auditing. The containers, initially intended for a proposed steam energy plant, are currently in custody of the Ethiopian Construction Works Corporation. Once retrieved, they will be transferred to CIC.
Unresolved Matters and Compensation
Several matters still demand resolution, such as compensations for farmers relocated for the project and the retrieval of payments made to former contractors without any substantial progress in construction. Additionally, the redesigning of the Yayu fertilizer complex is imperative due to the reportedly defective design prepared by MetEC.
Financial Burdens and Resolution
The project’s extensive delays and issues have incurred significant financial losses. The outstanding financial burden inherited by EEG from MetEC is being addressed by transferring EEG’s accumulated debts to the Liability and Asset Management Company (LAMC), a newly formed state-owned entity. LAMC has managed to settle a substantial portion of EEG’s debts, providing some financial relief to the beleaguered project.
Future Outlook
The project, once envisioned as a revolutionary venture, aimed to establish a state-of-the-art fertilizer factory with substantial annual output, including urea and several valuable by-products. Once the project is fully transferred, the Corporation plans to initiate a tender process to select a new, competent contractor to conclude the project. The finalization of the auditing report is crucial as it will determine the status of the transfer, guiding the project’s future trajectory and potentially leading to the realization of its groundbreaking aspirations.
Summary
The Yayu fertilizer project, despite multiple hurdles and delays, is moving towards completion with 85% of it successfully transferred to CIC. Several critical issues, including compensations, financial burdens, and legal procedures, are still pending resolution. However, the collaborative efforts between the involved entities and the prospect of selecting a new contractor post-transfer signal hope for the fruition of this ambitious project.
