Ethiopia: Houses Agency to Layoff 2,350
A restructuring study underway by the Ministry of Works and Urban Development (MoWUD) and leading officials at the Rented Houses Agency (RHA) is to layoff over 2,350 of the latter's 2,800 employees. The shake-up, which is in the final stages, will squeeze the 33-year-old Agency into a single office under the Ministry.
The committee undertaking the study presented their final recommendations to Arkebe Oqubay, state minister of MoWUD, and Enwey Gebremedhin, Agency director under a state ministerial portfolio, last Monday.
One of the three subcommittees studied what the overall restructuring should look like while another dealt with the Agency's plans to set out in real estate development. The third subcommittee deliberated on arrangements by which houses under the Agency should be administered.
One of the proposed recommendations of the committee is to outsource security and cleaning works to a private company through contract or give the responsibility to the tenants themselves. If this proposal is approved, around 1,000 janitors and security workers are feared to loose their jobs, sources disclosed.
Outsourcing of housing repair works is also a component and has brought anxiety among the 600 workers that may lose their jobs. The most drastic turnabout follows RHA's two-month old plan to enter real estate ventures after 17 years of absence from this work. The study recommends contractors undertake the ventures.
Rental payments by tenants will also be collected through arrangements with a bank if the proposal is given the go-ahead; the 100 current employees undertaking this duty would be laid-off.
"We know that a team of managers drawn from the Agency and the Ministry are working on RHA's restructuring," Haregawi Kebede, president of the Agency's workers union, told Fortune. "We are under threat because our request for explanation is ignored by the director."
RHA was established a year after a proclamation that confiscated urban land and extra houses was declared in 1975 after the Derg's ascension to power. It was given the mandate to takeover and rent houses for 100 Br a month.
The Agency now collects rental payments, refurbishes and privatises houses, grossing 50 million Br in annual profit and has stayed as an autonomous organ despite tenants' complaints with the services it renders.
RHA along with the Ethiopian Roads Authority (ERA) are accountable to MoWUD, which is structured in four bureaus, two offices and an institution.
"RHA needs restructuring," Arkebe Oqubay had told Fortune a month ago. "A decision will be made on the study in two months time."
The government has been maintaining that the Agency's output compared to the resources at its disposal is low as it has a huge workforce.
RHA finalised 366 houses and took over 815 houses confiscated by the military regime by the time it was created. Until 1991, the Agency invested 524.5 million Br on the construction and repair of houses and had 25,374 houses and 25 hostels under its supervision until 1993. However, the Agency lost 5,772 houses following the decision passed by the Council of Ministers to transfer houses located in regional states except those in Addis Abeba and Dire Dawa.
RHA lost part of the remaining 19,602 houses due to the demolishing works that have been carried out in Addis Abeba which dwindled houses under its supervision to 18,260. In 2006/07 alone, the Agency managed to collect 160 million Br from tenants.
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Nonetheless, the government has a plan to liquidate the Agency after it privatises all houses under its supervision.
An expert argues that the Agency does not have full-fledged information about the houses. It was just two months ago that it floated a tender to hire a bidder that would count the number of houses it administers.
"The restructuring is indeed necessary," the sector expert told Fortune. "However, the fate of the employees should be given due
Find thousands of Bilingual jobs at LatPro.com.
The committee undertaking the study presented their final recommendations to Arkebe Oqubay, state minister of MoWUD, and Enwey Gebremedhin, Agency director under a state ministerial portfolio, last Monday.
One of the three subcommittees studied what the overall restructuring should look like while another dealt with the Agency's plans to set out in real estate development. The third subcommittee deliberated on arrangements by which houses under the Agency should be administered.
One of the proposed recommendations of the committee is to outsource security and cleaning works to a private company through contract or give the responsibility to the tenants themselves. If this proposal is approved, around 1,000 janitors and security workers are feared to loose their jobs, sources disclosed.
Outsourcing of housing repair works is also a component and has brought anxiety among the 600 workers that may lose their jobs. The most drastic turnabout follows RHA's two-month old plan to enter real estate ventures after 17 years of absence from this work. The study recommends contractors undertake the ventures.
Rental payments by tenants will also be collected through arrangements with a bank if the proposal is given the go-ahead; the 100 current employees undertaking this duty would be laid-off.
"We know that a team of managers drawn from the Agency and the Ministry are working on RHA's restructuring," Haregawi Kebede, president of the Agency's workers union, told Fortune. "We are under threat because our request for explanation is ignored by the director."
RHA was established a year after a proclamation that confiscated urban land and extra houses was declared in 1975 after the Derg's ascension to power. It was given the mandate to takeover and rent houses for 100 Br a month.
The Agency now collects rental payments, refurbishes and privatises houses, grossing 50 million Br in annual profit and has stayed as an autonomous organ despite tenants' complaints with the services it renders.
RHA along with the Ethiopian Roads Authority (ERA) are accountable to MoWUD, which is structured in four bureaus, two offices and an institution.
"RHA needs restructuring," Arkebe Oqubay had told Fortune a month ago. "A decision will be made on the study in two months time."
The government has been maintaining that the Agency's output compared to the resources at its disposal is low as it has a huge workforce.
RHA finalised 366 houses and took over 815 houses confiscated by the military regime by the time it was created. Until 1991, the Agency invested 524.5 million Br on the construction and repair of houses and had 25,374 houses and 25 hostels under its supervision until 1993. However, the Agency lost 5,772 houses following the decision passed by the Council of Ministers to transfer houses located in regional states except those in Addis Abeba and Dire Dawa.
RHA lost part of the remaining 19,602 houses due to the demolishing works that have been carried out in Addis Abeba which dwindled houses under its supervision to 18,260. In 2006/07 alone, the Agency managed to collect 160 million Br from tenants.
Relevant Links
East Africa
Economy, Business and Finance
Ethiopia
Labour
Sustainable Development
Urban Issues and Habitation
Nonetheless, the government has a plan to liquidate the Agency after it privatises all houses under its supervision.
An expert argues that the Agency does not have full-fledged information about the houses. It was just two months ago that it floated a tender to hire a bidder that would count the number of houses it administers.
"The restructuring is indeed necessary," the sector expert told Fortune. "However, the fate of the employees should be given due
Find thousands of Bilingual jobs at LatPro.com.
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