From: Berhane Habtemariam (Berhane.Habtemariam@gmx.de)
Date: Sun Feb 07 2010 - 10:57:26 EST
Ethiopia's Hydro Plans Get Stuck in the Mud
Fri, 02/07/2010 - 3:09pm
On Jan. 13, Ethiopia's Prime Minister Meles Zenawi inaugurated the
<http://www.itacaddis.org/italy/index.cfm?fuseaction=basic_pages.basic_page&
page_name=70> Gilgel Gibe 2 scheme, the country's biggest hydropower
project. "It is possible to speed up development without polluting the
environment," Zenawi proudly declared as he cut the ceremonial ribbon. Yet
this was wishful thinking.
Due to shoddy preparation, the project had already been delayed by more than
two years. And less than two weeks after the inauguration, the project's
core component, a 26 kilometer-long tunnel,
<http://www.africaintelligence.com/ION/alert-ion/2010/02/02/major-problem-at
-gibe-ii-power-station%2C79521534-BRE-login> collapsed partly. Power
generation had to be stopped for several months. Ethiopia's hydro sector
demonstrates that there are not shortcuts to sound infrastructure
development. Cutting corners does not "speed up development," but produces
costly mistakes.
Gilgel Gibe 2 has a price tag of 374 million Euros and a capacity of 420
megawatts. The project works without a reservoir, but channels the water
discharged from the Gilgel Gibe 1 Dam through a long tunnel and a steep drop
directly to the valley of the Omo River. The undertaking was plagued by
shoddy management from the beginning. In violation of Ethiopian law, the
government negotiated the project contract with the Italian construction
company Salini without competitive bidding. No-bid contracts for public
works projects are a big <http://www.internationalrivers.org/en/node/4606>
red flag of corruption. The Gilgel Gibe deal was awarded without a
feasibility study, and construction started without the legally required
environmental permit.
In violation of Italian law and against the recommendation of its own
evaluators, Italy's Ministry of Development Cooperation awarded 220 million
Euros of aid money for Salini's no-bid contract. Gilgel Gibe 2 was "the
biggest development fund released to a single project in the history of the
Italian Cooperation," the
<http://www.itacaddis.org/italy/index.cfm?fuseaction=basic_pages.basic_page&
page_name=70> Ministry says proudly. The European Investment Bank, which is
<http://www.internationalrivers.org/en/node/2212> notoriously weak in
appraising power projects, contributed another 50 million Euros, and the
Ethiopian government funded the remaining 104 million Euros.
Gilgel Gibe 2 was supposed to be completed in Dec. 2007. Yet the poor
preparation soon took its toll. Deficient geological studies had overlooked
sandy soils and aquifers in the rock. The tunnel boring equipment got stuck
in the mud, and the engineers had to redesign the tunnel's path. As we
heard, the aqueduct collapsed only 12 days after its inauguration, nine
kilometers inside the mountain.
Who pays the price for such development failures? The dubiously negotiated
contract for Gilgel Gibe 2 exempts Salini from geological risks, so the
Ethiopian electricity consumers and tax payers ended up paying for the
cost-overruns. Salini will certainly try to shift the blame for the tunnel
collapse to Ethiopia once again. In the meantime, the country's poor remain
without electricity, and the environment gets spoilt for nothing.
Italy's Campagna per la Riforma della Banca Mondiale has
<http://www.crbm.org/modules.php?name=download&f=visit&lid=224> documented
the numerous legal problems and shortcuts of the Gilgel Gibe 2 project in
detail. The Campagna's Caterina Amicucci comments that aid projects like
Gilgel Gibe 2 "not so much address a country's urgent development needs, but
subsidizes a major Italian company." The Campagna and International Rivers
have <http://www.internationalrivers.org/en/node/5058> asked that the bill
for the latest disaster be paid by Salini and not Ethiopia's taxpayers.
Gilgel Gibe 2's dodgy deal is
<http://www.internationalrivers.org/en/node/4215> the rule, not the
exception in Ethiopia's hydropower sector. The contract for the slightly
smaller Tekeze Dam was awarded in 2002, and power generation was supposed to
start in 2007. Yet in this case, the ground on which the dam was being built
was too weak -- a fact which a proper feasibility study would have found in
advance. Landslides caused further delays, and the project was commissioned
two years late in 2009.
The story doesn't end with Gilgel Gibe 2 and Tekeze. In July 2006, the
government awarded a $2.1 billion contract for the
<http://www.internationalrivers.org/en/node/4300> Gibe 3 Dam -- its biggest
infrastructure project ever -- to Salini through direct negotiations. Again
there was no competitive bidding. Again project construction started without
an Environmental Impact Assessment and an Economic, Financial and Technical
Assessment. If built, the Gibe 3 Dam will devastate the fragile ecosystems
of the Lower Omo Valley and Lake Turkana, on which 500,000 poor farmers,
herders and fisherfolk rely for their livelihoods. Even though the project
violates Ethiopian law and their own safeguard policies, the African
Development Bank and the World Bank are currently
<http://www.internationalrivers.org/en/node/4606> considering support for
the project.
Will the collapse of the Gilgel Gibe 2 be a wake-up call for the World Bank
and the African Development Bank?
<http://www.engineeringnews.co.za/article/ethiopia-prepares-case-for-mega-hy
dropower-project-funding-2010-02-05> Latest news indicates that the
financiers, who refused to get involved in Gilgel Gibe 2, may yet shy away
from the dodgy Gibe 3 deal. They know that their credibility is on the line.
Peter Bosshard is the policy director of International Rivers.
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