Ethiopia: GTZ-IS Audit finds millions missing of birr at warehouses

GTZ-IS currently manages scores of warehouses scattered nationwide for the thirteen university projects and a number of other construction activities in Ethiopia.

Audit findings indicate missing stocks worth tens of millions of birr at the warehouses managed by the German Technical Corporation International Services (GTZ-IS) for the grand university project involving the construction of thirteen universities and other construction activities it is undertaking in Ethiopia, sources told The Reporter.

An international auditor from Germany had discovered missing stocks including reinforcement bars, PVC tubes and other construction materials from the warehouses managed by the German development agency when it examined the relevant books, according to sources close to the project being undertaken by GTZ-IS.

Martin Hansen, the Executive Director of GTZ-IS, has admitted that there could be some discrepancies and irregularities given that the project being undertaken by the organization is so huge that it requires a large quantity of construction materials and a grand-scale logistic operation. The director, however, said that he couldn’t substantiate the imbalances in the stock “because the audit report has not been finalized yet.”

Sources close to the project, however, told The Reporter that the missing stock of the reinforcement bars alone is worth over 17 million birr.

GTZ-IS currently manages scores of warehouses scattered nationwide for the thirteen university projects and a number of other construction activities it is undertaking, including health centers, hospitals and other facilities.

The German development agency set foot in Ethiopia about a decade ago when it began the construction of low-cost houses around the country. The organization was later invited by the respective government bodies to manage the construction of condominium houses in Addis Ababa and outside. GTZ-IS had been responsible for the management and design works of the condominium project.

With the intention of sharing its experience in management of low-cost housing projects, the Ministry of Education had in August 2005 directly awarded the university project to GTZ-IS without issuing an open bid. Consequently, the agency recruited international experts and scores of Ethiopian professionals and kick-started what became the single largest project undertaking it ventured into in Ethiopia and in a number of other developing countries.

Huge as it is, the Ministry of Education is expected to pay a total sum of over 374 million euros for the university project both in foreign and local currencies.

“The project was not intended to merely build the thirteen universities,” Wonwossen Kiflu, Minister of State for Education said. “It includes upgrading and enhancing the productivity of contractors and small and medium enterprises (SMEs) involved in the project while making sure the construction works are cost efficient. Accordingly, we have now more grade-one contractors and consultants and we were able to slash the usual 40 percent profit margin for such construction undertakings to 15 percent.”

Martin Hansen and Manfred Off, the director of the university capacity building program under the university project, told The Reporter that they were able to keep the cost of the construction below the originally projected budget by making sure the construction works run more efficiently and effectively.

Originally scheduled to be completed in April 2010, the project involves thirteen universities to be constructed at fifteen different sites.

According to Manfred Off, about 70 percent of the construction of the buildings is currently completed while 80 percent of the sewerage system and road infrastructure construction works remain.

Efforts are under way to complete the project before the current year winds up.

Meanwhile, a dispute has ensued between the management of GIZ-IS and the staff of the Logistics, Procurement and Transport (LPT) unit following a notice of termination the agency served on most of the unit’s staff. The management took the move as most of the procurement and logistic operation had been executed and there was no need to retain all the staff, according to Hansen.

However, the LPT unit submitted a petition also signed by representatives of the Ministry of Education to the management to reconsider the termination of the employees.

The management, however, has written a letter to the ministry informing it that the move it took is within the law, thereby firming its stand once again.

With more than 200 international and national experts, GTZ-International Services Ethiopia is the largest IS office worldwide, according to the information posted at its website. It’s working for Ethiopia’s sustainable development together with several government ministries, such as the Ministry of Education, the Ministry of Capacity Building, the Ministry of Health, and the Ministry of Mines and Energy as well as city administrations. GTZ-IS also supports international partners, such as the World Bank, the European Union and UNDP/GEF.