The Ethiopian Ministry of Urban Development and Construction had finalized a draft directive to make changes on the fixed rate pricing system currently applicable to all contractors working on government projects.

The directive will shorten the revision period of prices of construction materials and labor to three to six months, unlike the current practice where adjustments takes between nine month to a year and half.

The ministry is expecting to approve the directive in a month time, according to Wubshet Kibebew, Construction Contracts Management Officer with the MoUDC.

The price revision time table in the draft directive will not cover projects already underway. Projects currently underway will only be subjected to price revision after 18 months.

"It is to encourage contractors to finalize the construction within 18 months, rather than starting a project and waiting for the revision of price increment, which some contractors do" Webshet told Fortune.

The draft directive has been a year in the making.

Source: Fortune