Thursday, July 14, 2005

Salini Dominates Hydro-Dams in Ethiopia

Addis Fortune -- The Italian construction firm, Salini Construttori S.P.A., is making its strong presence felt in Ethiopia's hydroelectric dam construction projects with its latest take over of a lucrative contract; building a new multipurpose dam at Beles, estimated to cost over 5.4 billion Br. This will be the third massive hydro-dam contract for Salini; two of them were awarded without competitive bidding.

The Company's General Manager, Claudio Lautixi, signed a contract with his counterpart at EEPCo, Mehiret Debebe, at the Sheraton Addis on Friday, July 8. Salini has entered into a commitment to start construction as of the date of signing to complete the project in three years.

When completed, the Beles project will generate a 460MW of power, an addition to 750MW electric power EEPCo provides to the country. The largest existing dam is Gilgil Gibe, in the Oromia Regional State, which generates 184MW. It was built by a joint effort of the Spanish Nesco and Salini at a cost of 2.2 billion Br.

The successful completion of this dam in May 2004 seemed to give a credible reputation to Salini, which was subsequently awarded the construction of a tunnel for Gilgel Gibe II (425MW), whose cost is projected to reach 400 million Br.

"We believe our track record with EEPCo's other projects, the Dire water reservoir and Chida-Sodo road project gave us the credibility in the eyes of the Company," said Mr. Lautixi, at the signing ceremony. "We will achieve the success of this project to international standards."

His Company will do a turnkey project on the dam, to be erected on Beles River, located 650Km north-west of Addis in the Amhara Regional State. According to the agreement, this will include the engineering and procurement part of the project.

EEPCo's General Manager said the construction of this dam is part of his Corporation's five-year programme to increase the nation's electricity coverage from its present 15pc to 50pc. EEPCo has 700,000 customers in 470 towns, providing them with power from nine small and large dams. The Corporation plans to have a capacity of generating 2,900MW electric power in 2010.

Another major hydro-dam construction is underway on the Tekezie River, in the Tigray Regional State, at a projected cost of 1.9 billion Br. Built by Chinese construction firms, it will generate another 300MW power when completed in three years.

All the other seven companies undertaking major projects for EEPCo were, however, awarded through a competitive tender unlike the two given to Salini. Mehiret attributes his decision to Salini's assistance in soliciting the finance from the government of Italy, which is committed to cover 70pc of the cost. The balance is to come from EEPCo and the Ethiopian government.

Of the total amount, Salini will be paid 467.03 million euro. The design of this multipurpose dam was developed by ELC-Electroconsult of Italy. When completed, Beles Dam will help develop 7,000ht of land through irrigation.

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