Wednesday, May 22, 2024
NewsLiability Corp to appropriate plots in capital in bid to repay bloated...

Liability Corp to appropriate plots in capital in bid to repay bloated SoE debts

The Ministry of Finance has instructed the Mayor of Addis Ababa to transfer the title deeds of several sizable plots in the capital to the Liability and Asset Management Corporation (LAMC).

Adanech Abiebie has been notified of at least nine plots in Addis Ababa that have been earmarked for transfer to the Corporation. LAMC was established in 2021 with a subscribed capital of 570 billion birr to soak up debts accrued by state-owned enterprises (SOEs). The Corporation has thus far inherited over half a trillion birr of SoE debts resulting from an inability to repay loans amassed during the EPRDF regime.

Idle land in the capital is one of the assets the Corporation is authorized to use as an instrument to repay these debts, among other revenue streams.

“After taking over these plots, we’ll conduct feasibility studies and carry out feasible businesses on the land,” Mulualem Getahun, CEO of the Corporation, told The Reporter. “The businesses can include real estate, malls, or other ventures. Our priority is compensating the debts we are paying.”

The land plots designated for LAMC were previously under the management of a caretaker department under the Ministry of Finance. However, the caretaker lacks the means and mandate to develop the plots.

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Prior to caretaker custody, the plots belonged to SoEs that have since been privatized, but whose real estate properties remain under the state.

“For instance, when Harar Brewery was privatized, its Addis Ababa branch was not privatized and so some of its plots have been used only for warehousing purposes. The plots are not developed. Harar Brewery’s plots include one in the Meshualekia neighborhood. Another example are plots belonging to the former Upper Awash farming, which was also a state-owned state farm. A close to 15,000 square meter plot belonging to the former Upper Awash is idle around Saris,” disclosed Mulualem.

The Corporation has identified nine idle plots in the capital alone, in areas including Tewodros Square, Aware, CMC, Saris, and others.

The federal government privatized more than 100 SoEs during the EPRDF regime, but the plots these former state enterprises used to occupy have remained idle since, despite the enterprises being sold off to private investors. Most of these plots have been serving as warehousing space for documents and equipment belonging to the former SoEs.

A letter from the Ministry of Finance three weeks ago instructed the Addis Ababa Mayor’s Office to transfer the plots to LAMC. The Ministry has also allowed the plots to be included under the Corporation’s initial capital.

Still, there are other issues surrounding the plots.

Most of them were granted to SoEs during the Derg regime – often forcibly taken from private owners. Some of these former proprietors have since taken their land claims to court.

The legal issues mean it could take some time for the plots to be transferred to LAMC, foresees Mulualem. Some of the cases have been in courts for up to 25 years, following EPRDF initiatives to return the properties to the original private owners.

“It’s an inherited case,” said Mulualem. “If we win, LAMC will take over the plots. If we lose, some of the disputed plots will be given to the original owners.”

The caretaker had previously been involved in the court proceedings, but the complete transfer of its duties to LAMC means, from here on, the Corporation is responsible for the court cases as well.

Some of the plots in question also have no title deeds.

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