METEC Asks Ethiopian Government to Cancel Over 24B Birr of Debt
By Staff Reporter
August 20, 2019 (Ezega.com) -- Metals and Engineering Corporation (METEC) has requested the Ethiopian government to cancel its debt of more than 24 billion, money that the corporation borrowed from the Commercial Bank of Ethiopia (CBE).
The Corporation was established ten years ago by the Council of Ministers to advance Ethiopia’s industrialization drive. However, it has been a target of blame for lack of capacity, wastefulness and delays of mega projects, including the GERD.
Director General of the corporation Brigadier General Ahmed Hamza told local media on Tuesday that the corporation identified a 70 billion birr debt owed to it by lending institutions based in regional states and Addis Ababa.
Brigadier General Ahmed Hamza said, “The corporation is working to reimburse 13 billion birr it borrowed from different lending institutions. In a proposal submitted to the government to reorganize the corporation, we requested the government to cancel over 24 billion birr debt that METEC owes the Commercial Bank of Ethiopia.”
The director general blamed different stakeholders, including the government, for inappropriate financial procedure followed in managing the 24 billion birr that was supposed to go to the Grand Ethiopian Renaissance Dam (GERD) project and failed sugar factories.
In the proposal submitted to the government, the corporation also demanded the annulment of 11.3 billion arrears against it by the Ethiopian customs authority.
“We want the other 27 billion birr debt from the commercial bank of Ethiopia to be turned into capital goods and repay it on installment basis over the coming 30 years,” Ahmed said. According to the director, the military-run industrial conglomerate will collect 11 billion birr in account receivable and sell out used machineries, tractors and metals to repay part of its debt.
The government has arrested senior officials of the corporation, including Major General Kinfe Dagnew, former Director General of the corporation, on corruption cases, misappropriation of resources including procurement of ships from state-run Ethiopian Shipping and Logistics Enterprise.
Ahmed said the corporation is gaining momentum and some of its businesses are becoming more feasible.
In June, a parliamentary committee found that METEC squandered hundreds of millions of dollars in producing machineries without a thorough study to determine whether there was market for its products.
The Parliamentary committee also found that machineries worth $326.4 million were made by METEC, but were left to sit and decay at its warehouses in Bishoftu and Adama as there were no markets for them.