ESAT News (May 14, 2016)
The Ethiopian government pays 8 million dollars a month to employees of sugar factories even when the construction of these factories have not yet been completed and none of the factories have begun production due to a corrupt contractor with direct ties to the government.
The contractor, the Metals and Engineering Corporation (METEC), was awarded the contract to build 10 sugar factories 6 years ago but it has not completed none of the projects. The government meanwhile paid over 3.5 billion dollars to METEC, which is run by an army general of the ruling Tigrayan minority government, Kinfe Dagnew.
On top of the salaries being paid every month to employees who never have to report to work since the factories have not been built yet, the Ethiopian Sugar Corporation went ahead with the plantation of sugarcane, only to set it on fire at the time of harvest since there is no functional sugar factory to process the canes. The CEO of the Sugar Corporation, Endawek Habte put the blame on METEC, saying they have planted the sugarcane on the advice of the contractor which promised to complete the construction of the factories in due time.
METEC is awarded almost all mega projects in the country but has failed to complete any. Having no capacity to undertake the project, it has recently transferred to a third party contractor the electro mechanical works of the Abay Dam, boastfully referred by the corrupt government as the “Renaissance Dam.”
ESAT News (May 12, 2016)
The Metals and Engineering Corporation (METEC), a government corporation owned by Ethiopia’s ruling oligarchs and run by its generals has reportedly been singled out as the cause of the loss of millions of dollars incurred by a number of government institutions and projects.
METEC is awarded all major government contracts since it is also run by the same minority political elites who also happen to run the government.
In an unusual defiance against the established corrupt modes operandi, newly appointed managers of the Ethiopian Sugar Corporation told the Parliament that METEC has been paid way too much for contracts that it never materialize.
Five years ago, the contract to build 10 sugar factories was awarded to METEC but it has not completed a single factory while receiving 97% of the payment in some cases. METEC was also awarded the contract to supply machinery parts to the old sugar factories but the delay in delivery and the exorbitant prices was draining off the resources of the Corporation. More often than not, the factories stop production due to delay in delivery of machineries, according to the managers.
“If the old factories were fully operational, the country could have saved the foreign currency it spends on importing sugar,” a manager of the Corporation told the Parliament.
“The cost of a single machinery part, if we were to import it directly is about 10,000 dollars but METEC charges 30,000 dollars,” the managers cited as an example to describe the broad day light robbery by METEC under the auspices of government officials.
Professor of economics at Harper College, Dr. Getachew Begashaw said the corrupt regime has never had a macro economic plan that would benefit the poor people. “The corrupt regime is focusing on building 10 sugar factories but what the country needs is to engage in agriculture to produce food for the starving people,” he said.
“The sugar project was a scheme to loot as much money as they could. It was designed to generate money to the powers that be under the guise of government contracts,” Dr. Getachew told ESAT.
“What we have in Ethiopia is a parastatal economy where the oligarchs and their benefactors loot from the country’s coffers,” he said.