Africa's Major Construction Projects - African Business Magazine
Africa’s Major Construction Projects

Africa’s Major Construction Projects

Gibe Dam III, Ethiopia

Gibe Dam III is a dam and hydroelectric power plant currently under construction in Ethiopia, on the Omo river. When completed, the dam will be the highest in Africa, climbing 243m and with a reservoir capacity of 14 km. The Gibe III Dam would join onto the Gibe I and Gibe II. The associated power plant is expected to have a 1,870MW power output. The dam will be a high roller-compacted dam made of concrete. The project is scheduled to be completed by July 2013.

The construction of the project will offer a real boost to electricity supplies in the East Africa region. It will double electricity supplies in Ethiopia, where only 2% of rural dwellers currently have access to power. Some of the electricity is also expected to be exported to neighbouring countries, including Kenya (500MW), Sudan (200MW) and Djibouti (200MW).

The dam is also expected to improve flood protection for people living near the Omo river and reduce the damage caused by droughts.

The construction of the dam has faced several challenges. One has been difficulties over the design.

Although the dam was originally supposed to be a rock-fill dam, insurance challenges surfaced and the World Bank raised questions about whether the dam would be stable. The designers switched to proposing a roller-compacted concrete.

The dam has also faced criticism regarding the possible environmental repercussions of its construction; the procedure for the assessment impact has been questioned by some; and it was published post facto, two years after construction had already started and some critics contend that it lacks objectivity. In addition, eight tribes which live on the river and sustain themselves through livestock herding and agriculture are believed to be potentially significantly affected by the construction plans. It is also believed the dam might have detrimental repercussions for the water levels of Lake Turkana.


Mambilla hydroelectric power project, Nigeria

The Mambilla hydroelectric project, if successful, will result in the construction of the largest dam in Africa in terms of capacity.It should provide up to 2,600MW of energy by harnessing energy from the Mambilla plateau. The potential reservoir volume is estimated to be 4,100 cubic metres.

The project is estimated to cost around $1bn. There is heavy Chinese involvement, both in terms of the project’s financing and also in terms of the execution of the project (involved parties include China Exim Bank, China Gezhouba Group Corporation and China Geo-engineering Corporation). China’s expertise in dam building, due to its successful construction of the Three Gorges Dam, along with its huge network of around 2,000 dams, is widely seen to be a serious advantage. Nigeria’s funding is from its Subsidy Reinvestment and Empowerment Programme (SURE).

It is believed that the project would help address Nigeria’s power shortage issues and promote the country’s energy security. Other advantages that have been cited include increased opportunities for fishing and agriculture, thanks to a more abundant water supply, and the encouragement of the establishment of industry nearby, due to the newly available, reliable energy supply.

However, questions have been raised about whether the project will ever reach completion: there have been delays to its initiation.


Sudan-Chad Railway Line

The $2bn Sudan-Chad railway line project will link Nyala, the capital of South Darfur, Sudan, with landlocked Chad’s capital city, N’Damena.

This constitutes a massive overhaul for existing network lines – nearly three quarters of Sudan’s railway tracks are more than 80 years old and have suffered from decades of underinvestment, after a boom period in the 1960s and ’70s.

Trains will be able to reach speeds of 120 km per hour on the new track. It is expected to boost trade between the two countries and deliver a much-needed economic lifeline to landlocked Chad. The country lacks access to the sea and the new network will allow goods to be transported to and from the Red Sea quicker and more cheaply. The project is being partly funded by the Export Import Bank of China.

If successful, the project will potentially reinforce the improvement of relations between Sudan and Chad, which have, in the past, engaged in conflict against each other (2005–2007) and supported hostile rebel groups against each other.

East and Central African Railways

In order to encourage trade and economic integration, a railway network linking East and Central African countries (Rwanda, Burundi and Tanzania) is currently in the pipeline.

The value of the project is $4.7bn and construction will commence in 2014.

Another railway line, the Tanga-Arusha-Musom-Kamapala line, which will trace its way through Uganda and Tanzania, is also under way and is set to be finished by 2013.


Airport upgrades

The Nigerian government has plans to spend N32bn ($202m) upgrading 22 of the country’s airports. The project will be split into two phases, with 11 airports being awarded N16bn ($101m). The aim of the project is to help Nigeria’s airports to become more internationally competitive.

Airport upgrades are also taking place in Tanzania. The European Investment Bank and the World Bank are providing €50m to renovate five of the country’s airports – Tabora, Sumbawanga, Bukoba, Shinyanga and Kigoma. The project will take up to 20 years to complete. It is hoped that the refurbishments, which will include improved runways, will address security and safety issues with regards to the airports, enabling them to adhere to international safety standards. The ultimate aim of the project is to promote regional integration and facilitate economic growth.


Putting A Roof On Africa The ASL Way

The construction boom in Africa has opened up a whole new world of business for building material manufacturers and suppliers. While it has allowed established businesses to expand, it has also attracted a host of new entrants to the continent, who in turn have brought new ideas, products and approaches and spiced up competition.

One such new entrant is African Supplies Ltd (ASL) which, over a relatively short span of time has become one of the leading building materials distributors in Africa.

It was first established in 2000 to supply roofing products to the residential market. It operates, in particular, on behalf of AHI Roofing, a New Zealand company and the world’s leading manufacturer of metal roof tiles. AHI manufactures the company’s Decra and Gerard branded roofing products. Although ASL has also diversified into the supply of plumbing, sewage systems and drainage, it is still heavily focused on roofing.

The company first entered the African market because of the construction boom and massive demand for new houses on the continent. The fact that the middle class is expanding fast in Africa also means that the market for higher-end products, such as those offered by ASL, has great potential.

After five years of working to establish the brand in the market, the company finally broke even. It then went on to register a 25% average growth rate in volume terms over the next six to seven years that followed, and captured a sizeable portion of the market. It is now expects to double its size over the next three and a half years, and triple it over the next five years.

Its strategy for the expansion is to penetrate new market sectors. The products it currently offers are most appropriate for the higher end of the construction market – residences aimed at the upper and upper middle classes, but construction projects catering to this segment of the market are levelling off. The company therefore plans to create new products aimed at slightly less affluent segments of the market. ASL also plans to expand its operations to French and Portuguese-speaking countries.

Business model

The cornerstone of ASL’s strategy in Africa has been to build a brand identity for the products it represents; although Decra and Gerard products are well known internationally, they were largely unknown to the African market when ASL first got to work.

The company’s business model has been to collaborate with local partners in every African country that it operates in as well as talk to architects in order to seek out new projects; in the company’s own words, “finding those that were more innovative and dynamic, and understanding from them how we could best meet their needs”.

The company now has 14 permanent distributor bases throughout the continent. The company sees itself as bringing greater aesthetic, durability and performance to the markets. It has also endeavoured to be a pioneering branding force within the market, by heavily branding its products in a largely unbranded area of the building materials market.

The company also has a strong emphasis on training. It works to improve the customer service capabilities of its partners and employs trainers in West and East Africa to offer support to distribution partners. Through its programme Africa Build, ASL is also offering training to installers and fitters. The formally written programme has a practical focus and is exam based. The company will be seeking support from governments and NGOs to help implement the programme.

One the biggest challenges that the company faces is to not compromise the quality of its products in the face of competition. ASL maintains that the quality of its products and brand strength should be enough to win over customers in the long term.

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Written by African Business Magazine

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