A Nation Rallies Behind a Cause

"Mihret Debebe at Guba Benishangul Gumuz"

Back in the 1960s, the then Hailesellasie I University had a revered professor in engineering, credited for the establishment of the technology faculty at Amist Kilo. However, the German born Yehuda Peter (Prof) is remembered for instilling dreams in his engineering students, many of whom are in their 60s today.

For over three decades, some of Peter’s students have been turning into the nation’s finest and most celebrated engineers. These include Getachew Tasssew; Tadesse Hailesellasie and his partner in Berta Construction, Brehane Abate; Girma Muluneh (once Addis Abeba’s chief engineer); as well as Negussie Tebeje (Prof em), a prominent structural engineer.

Peter inspired a generation of Ethiopian engineers to keep alive his dream and conviction that it is possible to develop vast tracts of fertile land in Afar Regional State and the Ogaden Desert by irrigating it with a network of canals to channel the Abay River. This would require connecting Abay with Awash and Wabi Shebelle rivers, down in the Somali lowlands.

These engineers also thought that such a grand project could be of help to upstream countries because it would avoid sedimentation and floods in Sudan, save 10 million metrics of water per year from evaporating from Aswan Dam, and retain a significant portion of unutilised water flowing into the Red Sea.

Were this project to be implemented, it would have cost a projected half a billion Birr at the time, according to one of Peter’s students.

However, the dream has remained unrealised for more than a generation. Ethiopia never tried to take advantage of its natural endowments from the Nile Basin, primarily due to its inability to finance projects and geopolitical concerns over Egypt’s reaction.

Yet, this has changed, according to Prime Minister Meles Zenawi.

His administration’s determination to see the building of the largest dam in Africa shows “nothing can stop us from exercising our rights, [for] the other dams we plan to build are less challenging than this,” he said in the patriotic speech he made on April 2, 2011, at the site of a new dam to be constructed on the Abay River in Benishangul Gumuz Regional State.

The newly launched dam, whose turnkey contract was awarded to Salini Costuttori, an Italian company, without floating a competitive tender, will be the 10th largest dam in the world.

The electric power generation capacity (5,430MW) of Churchill Falls in Canada is only 180MW larger than that of Ethiopia’s Millennium Dam.

The idea of building Africa’s largest dam in the village of Guba, located 17km from the Sudanese border, dates back to when Peter was stirring passion among his students about the national dream of utilising the waters of the Abay River.

Almost half a century ago, Emperor Haile Selassie asked a young Pitra Angle (Eng), who is now 77, to study the possibilities of developing the Abay Basin, which is estimated to have the potential to generate a total of 10,000MW of electricity.

“I first came to this area back then,” Angle, who has been at Salini for 50 years, told Fortune last week while showing off the acacia trees in the gorge between Lebiyat and Neqor mountains.

Neither is the company new to Ethiopia. Salini Costuttori first built the Legedadi Dam half a century ago; a photo taken during its inauguration still sits on a desk in the Rome office of Pietro Salini (PhD), the eldest child of the company’s founder who is aged 82.

“It was a different Ethiopia,” said Salini, now managing director of the 75-year old company, following his father’s retirement.

Ethiopia has become more assertive since then. Meles alluded to this in claiming that his administration’s exercise in using Ethiopia’s right to develop its waters “shows no malice to any of our neighbours.”

“Among the concerns we factored in when we made the decision to build the Nile Dam with our own resources was to avoid any negative consequences for our neighbours,” Meles said before he laid the foundation stone alongside the river at a temperature of close to 40 degrees centigrade, while bulldozers were unearthing the hills to his right.

The project has been on the drawing board for some time. The site was first identified as suitable for a mega project back in 1966. The original plan was to generate 2,000MW of power, and used to be known as “the border project” during the time of the Emperor, according to Angle.

The design took him close to seven years to complete, a period he described as “very stressful.”

Estimated to cost close to 4.7 billion dollars, the idea of building a dam with the potential to generate 5,250MW was on the drawing board of the state owned Ethiopian Electric Power Corporation (EEPCo), under a code name of “Project X.” The project was baptised the Millennium Dam only recently, after the engineering, procurement, and construction (EPC) contract was signed with Salini in November 2010, with Metal Engineering Co. as the subcontractor for the dam’s electromechanical components.

However, many are critical of the decisions of the government in awarding expensive contracts to Salini without administering competitive international bidding to select the best candidate. Such were the modus operandi the corporation followed when it awarded Gilgel Gibe II and III, with generation capacities of 420MW and 1,870MW, respectively, as well as Tana Beles Dam with 460MW.

“The results from these projects show compelling evidence on the success of the APC model,” said Meheret Debebe, the longest serving CEO of EEPCo.

The main contractor to build the Millennium Dam is committed to complete the project within seven years. However, the plan is to start generating electricity from three of the 15 turbines as early as September 2014, according to Kifle Horo, one of the project managers assigned to the dam by EEPCo.

If EEPCo management is, for the first time, assigning two of its senior and most experienced engineers to manage one project, it is due to its sheer size, a close observer of the company told Fortune.

Located 700km west of Addis Abeba, the Millennium Dam will have two powerhouses with 10 turbines on the left side of the river bank and an additional five on the other side, each generating 350MW at a time. This is equal to the combined capacity of Tis Abay I and II, Koka, Melka Wakena, as well as Awash I and II dams.

While all nine dams in operation may not possess 35pc of the generation capacity of the new dam, the amount of money it will cost to build the latter is close to double of what it took to build all the others.

The dam will have a height of 145 metres, shorter than Tekeze Dam by 43 metres, while it will stretch 1,800 metres wide. Once completed, the dam is designed to hold 63 billion cubic metres of water, making this manmade lake twice the size of Lake Tana, the source of the river on which the dam is to be built.

“It is the largest dam we could build at any point along the Nile, or any other river,” Meles told those gathered to see him launch the project, including a few of his cabinet ministers and party leaders.

Building a dam of this size and proportion “is evidence of the government’s determination and vision incorporated in the transformation plan,” according to Mehiret.

The determination of the administration overcame more than 50 years of insufficient domestic funding and international lobbies against such plans by countries like Egypt.

“It is still attempting to undercut Ethiopia’s efforts to secure funding to cover the cost of the project,” Meles grumbled last week.

A few months ago, leaders in Egypt wrote letters urging donors and multilateral financial institutions not to provide funding for the project, the Prime Minster alleged.

Not only has this worked to keep these financiers at bay, it also compelled rather generous countries such as China, which recently withdrew its financing from the Chomoga Project, disclosed reliable sources.

Frustrated by these developments, a determined Meles turned to domestic sources for the finance. He embarked upon an ambitious project of persuading the nation to start a new culture of national savings.

“We are so convinced of the justice of our cause, so sure of the strength of our arguments, so convinced of the role of our hydropower projects in eliminating poverty in our country that we will use every ounce of our strength and every dime of money we can save to complete our programme,” Meles told delegates two weeks ago in a speech at a forum held at the United Nations Economic Commission for Africa’s (UNECA) compound to discuss the future of dams in the world.

In the administration’s bid to raise close to 11 billion Br from the public, he offered Ethiopians at home and aboard a Millennium Bond; it has a maturity period of five years and a yield of five per cent. The total cost of the project takes up to 11.5pc of the 769.1 billion Br the government is projected to use to finance public infrastructure projects under the GTP.

"worlds top 10 dams"

However, senior officials in the administration see the dam as a crucial component to the success of the plan. The plan to enhance the country’s ability to generate between 8,000MW and 10,000MW of power within the next five years, up from the current nearly 2,000MW, would be unrealistic without the completion of the Millennium Dam.

“This project will play a major and decisive role in realising the GTP and the consequent advance towards the eradication of poverty,” said Meles.

The reaction from the public was overwhelmingly positive.

Almaz Ayelew, 38, is one of the people who are willing to buy these bonds. A mother of two, Almaz works in one of the government offices for a monthly salary of 3,000 Br after paying income tax.

Subsequent to the announcement made by Teklewold Atnafu, governor of National Bank of Ethiopia (NBE), two days after the official launch of the dam, Almaz went to the head office of Development Bank of Ethiopia (DBE), on Thursday, April 7, 2011. She bought 3,000 Br worth of bonds instead of the 1,000 Br saving bonds she initially planned to purchase.

“It is not because I have enough money for consumption that I locked my 3,000 Br in the bank for five years,” she told Fortune proudly. “I want to see the dam being completed before I die.”

Almaz is one of the many enthusiasts who connect emotionally to the building of the dam, but not everyone does it for the sake of patriotism.

Sintayehu Lemma, a contractor, is one of the sober people who would like to invest his savings in the bond, but for profit.

“I only bought the bond after calculating my return as a businessman,” he told Fortune. “I am not going to buy anything emotionally like most other people. The government is expecting its citizens to do the impossible, all at once.”

There are others who would like to see the cost benefit analysis of the dam beyond patriotic fervour. Coupled with security concerns due to how close the dam would be from the border to Sudan, the suitability of the selected site is questioned by some local engineers.

The gorge in Aleltu, located not far from Addis Abeba, has a diving slope of 1,000 metres, which would give water a lot more momentum than the elevation in Guba, according to an experienced engineer.

The cost of the project is also a subject of worry to some. The Millennium Dam will be a very expensive dam to build when measured in the amount invested for every megawatt it will generate. The 14.85 million Br it will consume per megawatt is cheaper only by half a million Birr, compared to Tana Beles, the most expensive of all dams in the country.

Economic pundits are alarmed by the prospect of inflation due to the financing of mega projects such as the dam, which could exacerbate the already stressful situation.

Domestic revenues, including grants, are projected to reach at 615.6 billion Br, while public expenditure is expected to reach up to 769.1 billion Br during the lifetime of the GTP. The difference is expected to be filled by local and international loans.

If the government fails to obtain foreign aid, it might resort into printing money as an alternative, macroeconomic pundits worry.

Known in the West as quantitative easing, printing money is inflationary, according to an economic analyst.

There could also be supply-side constraints as a result. The Millennium Dam project will consume an estimated 10 million tonnes of cement before its completion.

The construction sector will thus be affected as essential raw materials, like cement, will be consumed by the dam, the economic analyst argued.

However, people like Almaz are optimistic about the dam.

“The total cost is expensive, but if all Ethiopians save by limiting their needs, I hope it would be manageable,’’ she told Fortune.

To his delight, such is the public mood Meles wanted to garner to see his dreams come true.

“It is a monument we want to build in recognition of Ethiopia’s move to herald a new beginning,” Meles said last week.

By TAMRAT G. GIORGIS
FORTUNE STAFF WRITER

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