Ethiopian Dam Suffers Tunnel Collapse Days After Inauguration

Back to Resources
First published on
This resource has been tagged as a Press Release

A critical water-passage tunnel in the newly inaugurated Gilgel Gibe 2 hydropower project in Ethiopia reportedly collapsed this week.  

With a price tag of 374 million Euros and a capacity of 420 megawatts, Gilgel Gibe 2 is currently Ethiopia’s biggest power plant. The project channels the water discharged from the Gilgel Gibe 1 Dam through a long tunnel and a steep drop directly to the valley of the Omo River.

The project, being built by Italian firm Salini, had already been delayed by more than two years. A high-profile January 13 inauguration was attended by Prime Minister Meles Zenawi and Italian government officials. “It is possible to speed up development without polluting the environment,” Zenawi declared as he cut the ceremonial ribbon.

About 10 days after the ceremony, African Energy Intelligence and the Italian public channel RAI 3 report, the project’s core component, a 26-kilometer-long tunnel, collapsed, shutting down operations for an extended period. The repair could take months, the news service reports.

Says Caterina Amicucci of the Italian group CRBM, “Gilgel Gibe demonstrates that cutting corners does not speed up development, but can rather produce costly disasters.” The group has been monitoring the potential for corruption on the huge project, which did not have competitive bidding, in violation of Ethiopia law.

The Gilgel Gibe contract was also awarded without a feasibility study. Construction started – again in violation of Ethiopian law – without an environmental permit.

Italian law and international agreements require that development aid only fund infrastructure projects that are based on international tenders. Yet in violation of that law, and against the recommendation of its own evaluators, Italy’s Ministry of Development Cooperation awarded 220 million Euros in aid money for Salini’s contract on Gibe 2.  The European Investment Bank contributed another 50 million Euros, and the Ethiopian government funded the remaining 104 million Euros for the project.

The project was supposed to be completed in December 2007, but shoddy planning took its toll. Poor geological studies overlooked sandy soils and other unexpected problems. Tunnel-boring equipment got stuck in the mud, and engineers had to redesign the tunnel’s path. Usually contractors carry the risks of such cost overruns. Yet the dubiously negotiated contract for Gilgel Gibe 2 exempts Salini from geological risks, so the Ethiopian electricity consumers and taxpayers ended up with the bill.

This new accident falls under the contractual responsibilities of Salini, and the company must restore the tunnel and cover all extra costs, but it is possible that part of these costs will again be transferred to Ethiopian taxpayers.

Despite the very weak institutional set up and poor performance of Gilgel Gibe 2, the main international financial institutions that supported it are now considering the next problematic project in the 5-dam scheme, the Gibe 3 Dam.   

In July 2006, the Ethiopian government again awarded a US$2.1 billion contract for the Gibe 3 Dam – the country’s biggest infrastructure project ever – to Italy’s Salini through direct negotiations. Again there was no competitive bidding. Again project construction started without an Environmental Impact Assessment and without a completed economic, financial and technical assessment.

“If completed, the Gibe 3 Dam will devastate the fragile ecosystems of the Lower Omo Valley and Kenya’s Lake Turkana, on which 500,000 poor farmers, herders and fisherfolk rely for their livelihoods,” says International River’s Africa Director Terri Hathaway.

International Rivers, CRBM, and Counter Balance call on the European Investment Bank and the Italian Cooperation to ensure that extra costs for Gilgel Gibe 2 will be covered by the contractor and sub-contractors and will not be transferred to Ethiopian taxpayers.  They also call on international financial institutions and Italian development aid not to invest in a Gibe 3 Dam which violates their safeguard policies and national law.


Ethiopia’s Gibe 3 Dam: Sowing Hunger and Conflict

The Gilgel Gibe Affair

The Gilbel Gibe II Hydroelectrical Project – A Case of Super-Tied Aid, 2008