Department MSc in PMAE

Course: Project Planning and Scheduling

Shortage of Residential House in Addis Ababa

Submitted to: Kumela (PhD)

Prepared by – Group 1 [2015 – Extension Programme -Section-1]

1. Endale Kassa

2. Gelan Abdurehman

3. Geremew Degefu

4. Mohammed Hassen

February 2023
Addis Ababa
1. DESCRIPTION
SMART REAL ESTATE PLC is established in November, 2022 G.C by 10 shareholders with a capital
of 25, 000, 000. 00 Birr each. The company engaging in the residential real estate investment and
managed business and will act as the acquisition and restoration manager, property manager, and
portfolio Asset manager. The company’s focus will be on acquiring depressed residential properties
and resealing or hold and renting after rebuild with modern or cost effective technology based on
scheme and transfer with fair price only for Addis Ababa residents associated with or wit out bank.

1.1 PROJECT TITLE

SHORTAGE OF RESIDENTIAL HOUSE IN Addis Ababa CITY

1.2 LOCATION(S)
The location of the project is in Addis Ababa City Administration including all sub-cities (Addis
Ketema, Akakai Kality, Arada Bole, Gulele, Kirkose, Kolefe Kereranio, Lideta, Nefase silk Lafto,yeka
and Lemi kura)

1.3 COST OF THE PROJECT AND AMOUNT REQUESTED FROM THE DONOR
AGENCY(FINANCIAL)

Amount requested from the % of total eligible cost

Loan bank of action
Total eligible cost of the action

8,000,000,000.00 ETB 5,600,000,000.00 70%

140,350,877.19 U.S Dollar 98,245,614.03 70%

NB: The % of total eligible cost of the action is calculated by dividing the Amount requested from

the Donor Agency by the Total eligible costs of the action and multiplying by 100, in case of cost

sharing

1 US $ = 57 ETB
Duration of the Project 36 months
Overall objective of the project: Increase sales by 15% on or before
December 31, 2026.
Decrease the cost of sales by 12 % on or
before Dec.31, 2026

Objective of the
project Specific objective of the project: To benefit the residents of Addis Ababa
By making house owners.
To reduce house shortage seen in Addis
Ababa city by constructing 10th floor
condo of 10, 000 house until 2026.
Partner(s) Smart real estate, AA municipal, bank, woreda 07 of bole, CBE bank
Target Group(s) Addis Ababa resident registered to buy and saved minimum requirement
and above age of 18 and those do not own house specifically low income.
Financial beneficiary Smart real estate, CBE, and transportation providers, suppliers employees
Estimated result  To provide 10,000.00 cost effective house for Addis Ababa
residents until December 31, 2026.
 To improve the life of Addis Ababa residents.
 To improve the satisfaction of Addis Ababa resident by making
house owners.

Main activities Planning, Approved design by authority, site selection/received land

from municipal/, process loan, hiring employees, provision of materials,
supervisions (implement project/building) and delivering
1.4 SUMMARY

1.5. Goals and Objectives

1.5.1. Goals
The project has the following goals

 To ensure that end users have input into the design process.

 To accomplish project business goals and objective with defined budget and timeline,

parameters.

 To provide 10,000.00 cost effective house for Addis Ababa residents until december31, 2026.

 To improve the life of Addis Ababa residents.

  To improve the satisfaction of Addis Ababa resident by making house owners

1.5.2. Objectives
The General Objective of Smart real estate plc are: -

 Increase sales by 15% on or before December 31, 2026.

 Decrease the cost of sales by 12 % on or before December 31, 2026.
 To invest in real estate and their immediate resale, or to hold and rent properties, generating
monthly income, while obtain market value appreciation over a large period.

Specific objective

 To alleviate house shortage seen in Addis Ababa city for 10,000 people in 2026.
 To benefit the residents of Addis Ababa

1.6 JUSTIFICATION
Addis Ababa is the capital city of Ethiopia. It is also the largest city in the country by population,
with a total population of 3,384,569 according to the 2007 census. The city has through recent years
seen a robust annual growth rate, 4.43% increase from 2021.The metro area population of Addis
Ababa in 2021 was 5,006,000.00 a 4.42% increases from 2020. The current metro area population of
Addis Ababa in 2022 is 5,228.000. Addis Ababa is a chartered city and as such, is considered both a
city and a state. Addis Ababa is the capital city of Ethiopia and the African Union and is often called
the "African Capital" due to its historical, diplomatic, and political significance for the continent.
Located in the foothills of the Entoto Mountains and standing 7,726 feet (2,355 meters) above sea
level, it is the third highest capital in the world. It is located in the geographic center of the country.
The city is divided into 10 boroughs, called subcities(woredas) and 99 wards(kebeles). The 10 sub
cities are listed as follows: These are (Addis Ketema, Akakai Kality, Arada Bole, Gulele, Kirkose,
Kolefe Kereranio, Lideta, Nefase silk Lafto,yeka and Lemi kura)

Currently 1.2 million people in Addis Ababa live in rented house while 2.5 million people share
rooms with other people and 375 thousand residents live in government owned houses and 70% of
house in Addis Ababa made of mud (AAHA, 2006). Until 2004 the Addis Ababa city government in
22 years is able to construct 300,000 houses of both schemes 40/60 and 20/80 condominium
distribute to the residents in 14 round. However, due to poor capacity of contractors and consultants,
and inadequate government supervision, most of the projects are behind schedule. Only 25,403
houses have recently been transferred despite the fact that 164,000 people are registered and wait for
this scheme.
In the past 22 years the Addis Ababa city administration delivered 300,000 houses for beneficiaries
but now close to a million people are on the waiting list for condo houses and have placed more than
10 billion birr into the Commercial Bank of Ethiopia for the program. Since its establishment as
AASHDE, has recorded several accomplishments required to transform the company to a level
expected from less cost to a competent & to modern condo house provider. So far, there is no such an
agency that able to provide for the resident of Addis Ababa city resident at high level capacity
building programs with in very short period of time, tried to curb recurrent quality of service
problems. Nevertheless, according to different studies and public opinions, customers are dissatisfied
with AASHDE service provision and the company has been receiving many negative feedbacks
(AASHDE) company profile, 2015). According to (Capital, July 30, 2017), the challenges faced by
AASHDE and the customer dissatisfaction are increasingly worsening for customers. Now the Addis
Ababa city government invites the private sectors to engage in construction of cost effective condos
as the result Smart Real Estate is interested to engage in construction of the cost effective condos
since the land for construction of condo is provided by city administration free of charges oppose to
luxury aspartames’ land is provided with lease or acquiring.
1.7. DETAILED DESCRIPTION OF ACTIVITIES
The project is expected to dispose the following activities:

 Site selection

Site selection Initial site investigations are based on the geographical areas in city administration,
where potential sites are considered in terms of providing suitable settings for the construction of new
buildings and analysis of the sites. The Project team to conduct a series of detailed studies on the area
including the carrying capacity of the site; the local environmental aspects; the existing water supply
and access roads; any existing pollutants and their potential relocation; the community’s desire for
house; and the physical and economic frameworks that exist. The Project team will also look at the
impact a large-scale residential development would have on the existing social structure of the area. If
the studies conclude the site is suitable for house development, a request will have forwarded to the
Land development and management office, to secure the land for a house project.

 Preliminary site and housing unit design

It’s important to develop the site plan for the housing construction. Although the housing block
designs are largely set (in terms of unit types, number of storeys, etc) is for the site design, the layout
of the blocks, communal buildings, and open spaces on the site. Entrants are short-listed and then
develop the design.

 Land clearance, compensation, temporary resettlement construction contractor

 engagement
If the proposed development site is occupied by kebele housing, the project aims to undertake wide
and open consultation with existing residents on plans for housing development. Households that are
to be relocated to make way for house development are either: resettled (in another kebele),
compensated, or they get first option for a new housing unit on the site.

 Construction stage

A central feature of the projects is the centrally sourced and distributed building materials. The
SMART Real Estate will purchase all materials in bulk in an effort to reduce the cost and control
quality. This means that there is less risk for contractors of material cost overruns. Construction
quality is monitored by project quality advisor, who conduct on-site checks.

 Unit allocation and transfer

When construction work is complete, beneficiaries come forward, they must sign form at SMART
Real Estate plc as a form of contract with the company for the first stage of the transfer. Depending
on whether or not they decide to take advantage of the bank loan available to them according to the
rule and regulation of the company.

Table 1. Four-phase SMART Real-estate housing development flowchart

Phases Description of Steps

- Policy and advocacy work
- Create an inclusive budget factoring land and excavation, house size and
1. Planning shape, number of stories, type of roof, fixtures, home design features and
home appliances
- Human resource
2. Financing - Identify, acquire and prepare land for physical development
- Choose a construction method
- Develop building plans
- Obtain building permits and inspections (submit plans and complete a
permit application)
- Construct projects
3. Building - Request inspection (Final inspection performed, and a ‘Certificate of
Occupancy’ is issued)
- Occupy, sell or allocate and transfer housing units & Run facilities, management
4. Operating and operations, and maintain occupancy
1.8. METHODOLOGY
In this proposal the type of methodology used to conduct the project proposal is a survey type,
depending on this, the implementing the project will engage many players including municipality of
A.A, woredas, media, police, community and the neighborhood of the project site as well as private
property owner’s developers. Since Implementation will also require careful coordination of variety of
planning systems, capital improvement programs, & regulations. A clear phasing program is therefore
on essential part of an implementation strategy. These are some of the tools and techniques that may be
used further analysis should occur to determine the approperteness of each tool and technique.

Capital Improvement program

The Smart real estate capital improvement program could be an important source of funds for
infrastructure replacement. This should be annual source of funds for several years of phased
improvements phasing.

Early phasing consideration to apply when evaluating the five alternatives device scenarios.

1. “Focus” on the most” stable” area.

2. Create Noticeable impact
3. Emphasize viable uses
4. Make room for directly affected existing use
5. Keep property acquisition simple

1.9. MONITORING & EVALUATION (M & E)

The execution stage of a project is the transformation of a theoretical and planned concept into
physical and material structures. It is also the stage which integrates people and other resources to
carry out the project management plan for the project. L.Chtram (2011),

Monitoring and evaluation is very critical to avoiding delays and cost overruns are the key duties
provided to the project leaders for early recognition and avoidance of any problems. Both the project
cost and the schedule can be influenced by variables within and outside the control of the organization.
Variables that fall within the organization’s control include the approach to construction, labor
productivity, site policies, safety culture, working conditions and wage rates, personnel turnover, level
of training, and working hours, all of which can have a significant impact on the project schedule and
budgets. Cost overruns can be further influenced by the organization’s procurement policies,
underestimation during the budgeting process, the absence of control and appropriate measures to
ensure adequate control, and accounting procedures and practices.
The SMART Real Estate Plc will follow below process to monitor the project performance and
process.

The successful accomplishment of the project objective is usually constrained by four factors: scope,
cost, schedule, and customer satisfaction. (Gido and Clements, 2009).

1.10.DURATION AND ACTION PLAN

The duration of the action will be 36 months

Year 1

Quarter 1 Quarter 2 Quarter 3 Quarter 4

Activity Month 2 3 4 5 6 7 8 9 12 Implementing body

10 11
Site Selection Gov& Project Ma.
Preliminary
site and Design department
housing unit
design
Land clearance Property department
and
compensation
Construction Engineering
Site department
 Unit allocation Resourcedepaartment
and transfer
Post
Occupancy

For the following years

Activity Quar. 5 6 7 8 10 11 12 Implementing body

2. EXPECTED RESULTS, OUTCOMES AND OUTPUTS

2.1 EXPECTED IMPACT ON TARGET GROUPS/BENEFICIARIES
This project is expecting to have the positive impact on target beneficiary in many ways the first way
is by reducing the expense they paid to house rent and converting this into an asset since instead of
paying house rent they pay the house installment and by doing this when they complete they become
the owner of the house and finally they sell or borrow money as a means of collateral in addition to
this they also live better situation when they get a house because when the rent in a small area they
live in suffocation and uncomfortable manner but they got the condo at least they will have their own
room and finally the level of stress will reduce and they become more productive and this impacts
even the GDP of the country, when they got the house they pay in long term which is up to 20 years
this helps improving the life style they live in better situation than the earlier times as the result
psychological negative impact reduce, the amount of expense on food items will increase because
they save some amount of money from the rent as the result they can eat well balanced diet in
consequence the their health also positively affected.
2.1 MULTIPLIER EFFECTS
On those areas in which the new condo builds earlier resident they got chance of generating additional
income and also better infrastructure like school, hospital, green area, business center, transportation,
job opportunity, business opportunity and the like for the new area due to this project hence in one
condo building a lot of people they live as the result they can get enough customer for the business
easily. For the existing resident and for the new one also even the government also get a lot of tax
revenue as the result it create big opportunity for a lot of sack holders.
2.2 SUSTAINABILITY
Concerning financial sustainability since banks give a loan for the 80 % of the cost for condo banks get
sustainable saving means from those house owners and from the house owner side if they want to rent
it also uses as means of income generating since it is an asset but the most important thing for the
community and the business it use as a means of income generating sustainable manner hence the
community use the product and the service rending by the newly established village.

Recently the government and the city administration give high attention and as the result they lead the
program in the Institutional level and this helps the city administration to build the better city for the
resident as well as for the country and also transferring the experience for other regional administrations.

If we see from the country policy point view every citizen has the right to live and move and generating
wealth it has positive impact by improving individual income, this finally leads to improve the GDP of the
country as the result it will impact the overall policy structure directly and indirectly.
2.3 RISK AND ASSUMPTIONS
The project assumes the following:
 We will get all the resource we need on time
 During the Rainey season, cheap labor will be available
 All relevant stake holder will come to the next meeting
 All equipment is in a good condition
 The supplier will deliver consumables on time
 Construction raw material price relatively remains the same
 3. BUDGET FOR THE ACTION/PROJECT

ACTIVITY BUDGET CONTRIBUTED BY

Site Selection 200,000 SMART Real Estate Plc

Preliminary site and housing unit design 500,000 SMART Real Estate Plc
Land clearance and compensation 500,000,000 A.A City Administration
Construction Site 2 Billion Resident

Unit allocation and transfer 1 Million SMART Real Estate Plc

Post Occupancy 500, 000 SMART Real Estate Plc

Budget

Project Name Condominium building

Date Prepared  December 2023
Area  700,000 m2

Income

Contract Price 2 000,000,000.00 

Expenses
Budget Item Cost Cost per m sq. Notes
Design  25,000,000.00 0.0035  
Permits  250,000.00 0.36  
Surveying  150,000.00  
Insurance  500,000.00  
Temporary fencing  450,000.00  
Equipment rental  25,000,000.00  

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Temporary utilities  5,000,000.00  
Dumpsters  3000,000.00  
Supervision  3.9, 000,000.00  
89,000,000.00
General labor  
8,000,000.00
Cleaning  
     
Excavation  5,000,000.00  
Underground utilities  8,000,000.00  
Landscaping/irrigation 10,000,000.00  
     
45,000,000.00
Foundation/driveway  
21,000,000.00
Masonry/stone  
9,000,000.00
Rough carpentry/lumber  
6,000,000.00
Millwork/cabinetry  
65,000,000.00
Insulation  
55,000,000.00
Roofing  
23,000,000.00
Siding  
34,000,000.00
Doors and hardware  
25,000,000.00
Windows  
15,000,000.00
Drywall  
10,000,000.00
Flooring  
15,000,000.00
Painting  
5,000,000.00
Specialties  
5.8,000,000.00
Appliances  
10,000,000.00
HVAC  
28,000,000.00
Plumbing  
55,000,000.00
Electrical  

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Low voltage/security 17,000,000.00  

Subtotal Birr -  
Sales tax  

Total Expenses Birr -  

Soft costs/General conditions Birr -

Site Birr -
Building Birr -
Overhead/profit Birr -  

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 4. LOGICAL FRAMEWORK
Overall objective
 Increase sales and
decrease cost of sales of
residential houses.
Project purpose
To benefit the residents of Addis
Ababa by making house owners.
Results
 10,000.00 cost effective
Objectively verifiable indicators Sources of Verification Assumptions
 Addis Ababa Housing project
 Increase sales by 15% on
office report
or before December 31,
 Addis Ababa Construction and
2026.
Housing development office
 Decrease the cost of sales
report
by 12 % on or before
 Shortage of residential house
Dec.31, 2026
survey
Objectively verifiable indicators Sources of Verification
 Addis Ababa
City
administration
support for the
project
Reduce house shortage seen in  Addis Ababa Housing project
Addis Ababa city by office report
constructing 10th floor condo of  Addis Ababa Construction and
Housing development office
10, 000 house until 2026.
report
 Shortage of residential house
survey
Objectively verifiable indicators Sources of Verification Assumptions
 Data on Construction and  Publications and portal websites
in
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 official and Ethiopian media;
 Addis Ababa Housing project
office report  Loan availability
house for Addis Ababa  Addis Ababa Construction and for resident
residents is provided. Housing development office
housing development report
 The residents Satisfaction  Resident satisfaction survey
is improved  Survey on satisfaction of
Addis Ababa resident.

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 Annex

Stakeholder analysis

Relative
Potential
Secondary Interests prioriti
project
Stakehold es of
impact
ers interest

Addis Ababa Make the residents house owners

Housing project through fair distribution. 6

Office

Addis Ababa housing 6

To alleviate house shortage seen in Addis
development and Ababa city
administration

Addis Ababa Monitor the proper administration of

Construction and governmental and public housing
Housing development administration 7

office
To monitor the quality and standard of the
raw materials for the construction
provided by producers and importers

To produce construction materials and

utilize to enable cost effective
governmental constructions

Addis Ababa City 9

Financial support and administrative task
Administration

17
 Addis Ababa Land Making the provision of regular tenure 10
development and services transparent, efficient, fair and
Management accessible
Addis Ababa Savings 7
Housing development
Enterprise
Addis Ababa Land 8
*
Tenure Certification

Addis Ababa Revenue 4

*
Bureau

Addis Ababa Job 5

*
Creation and Enterprise
Development Bureau

Primary Stakeholders

*
Lower income
5
groups

"External"

stakeholders

* 6

Non-government
organization or Donor
agency

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 PROBLEM TREE

High
High More pressure on High
stressful
living cost gov't instability
life
       
High
Increased high illegal
inflation Increase instability
house rent settlement
rate
                     
 
Shortage of
house in A.A
                     
     

High internal poor land governing poor gov't capacity of

migration policy building condo

           
Low
High poor low priority
low job Increased
political engagement financial for
opportunity corruption
instability of project capacity residential
house

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 OBJECTIVE TREE

low low
less pressure Less
stressful living
on gov't instability
life cost
       

         
reduce
Decrease Decrease low illegal
inflation
house rent instability settlement
rate
                     

 
Availability
of house in
A.A
                     

     
efficient land governing High capacity of gov't building
Low internal migration
policy condo
           
Low high High
High job High
political Decreased engagem priority for
opportuni financial
instabilit corruption ent of residential
ty capacity
y project house

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 SMART REAL ESTATE PLC

ORGANIZATION MATRIX

Top Management
                             

           

           

                     
Functional 10/90 20/80 30/70 40/60 100%
  Organization     project     project     project     project     project  

                                 

                               

SWAT ANALYSIS

Metric Point 1 Point 2

Strength Quality produces Excellent management team

Weakness Small store area Low number of workers

Opportunities Affordable land for lease or condo Increasing numbers of house applicant

Threats The risk of direct competitors in the area Increasing employee salary

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