Fetching Underground

Fetching Underground to Develop Over Ground

Ethiopia has vast water resources. However, only a fraction of the potential has been realized thus far. Access to fresh water is still a problem in both rural and urban parts of the country. Given the high population growth rate, Ethiopia should utilize groundwater for both agriculture and household use. However, little has been done to tap the huge groundwater resource in the country. EBR’s Mubarek Jemal reports.

Ethiopia is endowed with substantial amounts of water resources. In addition to lakes, rivers, and other water bodies that cover 0.7Pct of land area, vast amounts of groundwater is available in the country.

According to an assessment by the Ethiopian Geological Survey, which only covered one third of the landmass, the total groundwater reserve of the studied areas in Ethiopia is estimated at 36 billion cubic meters per year. But the country lags behind in utilizing its underground water reserve to boost access to water.

Existing underground water projects are mainly financed by NGOs and governmental budget, according to Tedros Mergia, Communications Director at the Ministry of Water, Irrigation, and Energy. “The majority of the water wells are drilled manually. Modern drilling technology is only applied on few groundwater projects,” he explains. “The private sector has not even started investing on groundwater projects.”

The demand for underground water was scaled up especially after the severe drought brought on by El Nino in 2015. Yet, underground water usage is higher in Addis Ababa compared to other parts of the country, where the city administration recommends large establishments, especially hotels, real estate developers, and factories, to use their own groundwater where possible. Out of the total water supplied in the capital, one third is groundwater. Addis Ababa Water and Sewerage Authority is currently finalizing the drilling of 17 deep water wells, under the second phase of the Legedadi Underground Water Development Project, to generate 86,000 cubic meters of water daily.

Commercial bottled water companies are the main beneficiaries of groundwater resources. This is contrary to other African countries where households are the major clients. For instance, in Tanzania, the major clients for water well drilling companies are individual homes.

Although the federal and regional governments as well as NGOs allocate huge funds for rural water projects each year, local drilling companies are not willing to go to remote areas and execute projects, according to Tedros. “They also lack the willingness to invest in capacity building as well as in new skills and machinery.”

According to stakeholders, the main reason for the low utilization of groundwater sources is the shortage of strong local drilling contractors. Currently, over 53 local and 15 Indian and Chinese groundwater well boring companies are operating in Ethiopia. In addition, regional governments have their own public companies engaged in the field.

“The drilling business is no more attractive,” says Mesfin Mamo, one of the founders of ECS Waterworks Construction. “Due to many hinderances, companies which have been in the business are currently shifting to other sectors, rather than expanding and specializing.”

ECS Waterworks Construction was established ten years ago with ETB10 million in capital growing to its current ETB52 million. It undertakes around fifteen shallow well projects, 10 medium depth, and six rehabilitation projects per year. The company has four rigs that can drill down to 600 meters, according to Mesfin.

However, Tedros argues that groundwater drilling business in Ethiopia is highly profitable but not exploited enough. “Most of the drilling contractors just want to amass profit with few projects and leave the sector. Most of them lack the commitment to stay in the business and develop capacity and expertise.”

Tedros admits a legal framework is lacking which can enable regulation and support local drillers. “The number of active drilling companies is not known. Over 60 businesses are licensed but most of them are not active. Others are operating without license”

The Basins Development Authority (BDA) licenses drilling contractors while regional offices provide drilling permits. The minimum paid-up capital for water well drilling companies which can handle drilling projects costing over ETB200 million, is ETB20 million, which is reduced to ETB10 million for companies executing projects worth between ETB100 million and 200 million. On a lower scale, a drilling company with ETB100,000 in paid-up capital can involve in drilling projects valued up to ETB1 million, according to a directive introduced by BDA, established in 2018 to promote integrated water resource management.

A level one drilling company is required to have at least two dozers, a truck-mounted crane, a loader, a grader, and an excavator hammer. But a grade one drilling supervising company, which handles drilling projects above ETB200 million, can be established with ETB500,000. Rotary rigs that can drill down to 400 meters can be rented between ETB1,000 and 2,000 per hour.

“Government allows the duty-free import of machines but it is usually abused,” stresses Beshah Behailu (PhD), Commissioner of the newly established Water Development Commission (WDC). Recently, the WDC introduced strict criteria for reregistering drilling companies, mainly because companies list fake machinery and professionals to renew their license.
A drilling contractor must have two geologists, two hydrogeologists, and relevant machines, at least. However, companies usually rent licenses and degrees from professionals not actually working at the company.

Tedros says Ethiopia is very backward in terms of engaging the private sector in water supply. “The government’s plan is to increase access to clean water to 100Pct coverage but cannot achieve this alone,” he explains. “So, the government is planning to engage private drilling companies to supply water to customers. They can negotiate the tariff, install the pipelines, and supply groundwater to customers.”

However, stakeholders stress that there are many problems hindering the growth of local groundwater well drilling contractors. The first is poor project management. “Local contractors cannot finalize projects in the allocated time. Since they do not invest on themselves, local contractors are inefficient,” argues Shumet Kebede, Managing Director of Derba Drilling and Hydrology. Established with ETB138 million, the company owns three rigs that can drill down to 1,000 meters below ground.

For this reason, Indian and Chinese contractors are currently taking over the drilling business from local companies. The number of such companies operating in Ethiopia grew from five in 2006 to its current 15.

Mesfin agrees. “Although Indian companies have been dominant, Chinese firms are starting to engage on a large scale. Due to their poor work culture, local contractors are unable to cope up,” says Mesfin.

The second major problem is the unavailability of essential materials for drilling projects such as casing steel and PVC. “For instance, casing steel is supplied by importers who struggle to access foreign currency regularly. Due to this, we sit idle for more than six months after winning the project,” explains Mesfin.

Since materials are hard to find in the local market, their prices skyrocket. Especially casing steel and PVC currently take-up more than half of the drilling project’s cost, because they are hard to find in Ethiopia.

Abebe Dinku, Professor of civil engineering at Addis Ababa University, says local drilling contractors are not growing mainly because the system in Ethiopia does not allow the private sector to develop. “Government wants the private sector only when it needs it. Especially the drilling subsector is the least incentivized. Government must provide support and incentives in order to better utilize Ethiopia’s groundwater resources.” EBR

9th Year • Feb 16 – Mar 15 2021 • No. 95


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