The Government of Ethiopia has taken the decision on the much-delayed Yayu Fertilizer Project, pinching it away from the maligned state-owned military-industrial conglomerate, the Metals ans Engineering Corporation (MetEC), and awarding it to the Moroccan fertilizer and phosphate maker, OCP.
Presenting his ministry’s eight month report before the House of People’s Representatives (HPR) on Tuesday, the Minister of Agriculture, Umer Hussien, said that an agreement has been reached with OCP to jointly carry out the remaining works of the plant.
According to the government, Yayu plant construction was terminated since last year after MetEC was unable to complete the construction despite repeated delays of more than seven years. It was also announced that MetEC only managed to accomplish 46 percent of the project which was launched in 2011 with an initial investment cost of 11 billion birr (USD 400 million). After seven years, MetEC has since asked for an additional 20 billion birr to complete the project.
The minister, however, did not disclose the project cost that would be paid to OCP and how long the Moroccan company would take to complete the construction.
In addition, the minister has indicated that due to the repeated delays of the project construction, the country is spending billions of dollars every year to import fertilizer. He added that, currently over 1.2 million tons of fertilizer has already been purchased, which is higher than the previous year by 100,000 tons.
He added that the country spends more than USD half a billion for the purchase of fertilizers’.
The Yayu complex is under construction on a 54,000 sq. m plot of land and is designed to manufacture 300,000 tons of Urea, 250,000 tons of DAP fertilizers, 20,000 tons of ethanol and generate 90MW of electric power annually using 9.2 million tons of coal. The finished complex will look to hire close to 35,000 workers. The complex is also intended to have 75,000 tons of solid waste that can be recycled as an input for the production of construction materials such as bricks and cement.
The decision to cancel the contract (from MetEC) came from the Office of the Prime Minister following the repeated calls to terminate the contract by the then Ministry of Public Enterprise (now State Enterprises, Asset and Administration Agency, which is the owner of the project.
The Yayu Complex is the second largest project undertaken by the government next to the USD four billion Grand Ethiopian Renaissance Dam.