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Ethiopia: Anticorruption Comm'n to Investigate Real Estate Plot Grants
Real estate news By Wudineh Zenebe
22 October 2007
The Federal Ethics and Anticorruption Commission (FEACC) will investigate the alleged shady deals behind plot grants to real estate developers. A committee of four experts established under the Commission went operational last Wednesday. FEACC, which has been busy apprehending purportedly corrupt officials from districts in the past three months, turned its attention to real estate following fraud accusations brought to its attention, a source at the Commission told Fortune. The committee will examine ways in which the City Land Development and Administration Authority grants plots to real estate companies and is empowered to take action if irregularities are found in the process.
There are 408 real estate companies with a combined registered capital of 42.9 billion Br which have requested 95.7 million square metres of land. About 100 have received land and half of them have started construction. The real estate business boomed following a proclamation issued by the former city provisional administration in November 2002. Prior to the proclamation which provides incentives for developers, the number of real estate companies in the city was not more than five, the biggest being Ayat and Berta Real Estate.
Boosting the fledgling private sector, a 50sqm plot was granted to all real estate investors with the understanding that they were to use 70pc of the land to build condos and villas for low income residents using the remaining 30pc for single family homes. However, most of the investors used the land for different purposes or sold it to a third party, officials at the City Administration disclosed. Not only were condos never built, but the government's ambitious plan to halve the housing shortage of the city has yet to become a reality.
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