ETHIOPIAN ENGINEERING CORPORATION

REVISED FXED ASSET VALUATION

Final Report

April 2025
Addis Ababa

P.O.Box-2569 Addis Ababa, Ethiopia

Tel : 011 661 03 61, 011 661 09 00
Web Site: www.ipdc.gov.et
E-mail: [email protected]

Project No. VSA – 126/122-2015

 Ethiopian Engineering Corporation Fixed Asset Valuation - Final Report

TABLE OF CONTENTS
Page
I. INTRODUCTION.......................................................................................................1
1.1 Background.........................................................................................................1
1.2 Objective of the Valuation...................................................................................2
1.3 Scope of the Valuation........................................................................................2
II. LOCATION AND DESCRIPTION OF THE ASSET...................................................3
2.1 Location of Fixed asset ..........................................................................................3
2.2 Land……………………………………………………………………………………….3
2.3 Buildings and Civil Works....................................................................................3
2.4 Heavy Duty Machineris.....................................................................................19
2.5 Surveying and Laboratory Equipment...............................................................19
2.6 Motor Vehicles.................................................................................................. 19
III. DEFINITIONS OF VALUES.....................................................................................21
3.1 Buildings and Civil Works..................................................................................21
3.2 Heavy Duty Machinery , Laboratory & Surveying Equipment...........................21
3.4 Determination of Service Life............................................................................22
3.5 Determination of the Present Condition...........................................................22
3.6 Determination of Economic Remaining Life......................................................23
3.7 Determination of Depreciation Factor...............................................................23
3.8 Motor Vehicles.................................................................................................. 24
IV. APPLIED METHODOLOGY.....................................................................................25
4.1 Assets Verification and Conditions Assessment...................................................25
4.2 Data Inputs of the Assets Valuation......................................................................26
4.3 Estimation of the Current Values of Assets.........................................................26
V. CAVEATS............................................................................................................... 28
VI. VALUATION RESULT............................................................................................ 19

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 Ethiopian Engineering Corporation Fixed Asset Valuation - Final Report

List of Tables

Page

Table 2. 2: Land Lease Value……………………………………………………………....4

Table 2. 3: Existing Conditions of the Buildings and Civil Works................................5

Table 6. 1: Summary of Asset Valuation Result........................................................25

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 Ethiopian Engineering Corporation Fixed Asset Valuation - Final Report

Acronyms

GRC - Gross Replacement Cost

DRC- Depreciated Replacement Cost
ERL: Economic Remaining Life
TUL: Theoretical Useful Life
CF: Condition Factor
Y.C: Year of Construction

List of Appendices

Page
Table No. Description No.
Table 6.2a Description of Building and Civil Engineering Works for EEC

Table 6.2b Valuation Details Building and Civil Engineering Works for EEC

Table 6.2c Condition of Building and Civil Engineering Works for EEC

Table 6.3a Valuation Details of Heavy Construction Machinery and Equipment

Table 6.3b Valuation detail of Geotechnical, Water well drilling & Machineries
for EEC
Table 6.4 Valuation Details of Surveying Equipment

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 Ethiopian Engineering Corporation Fixed Asset Valuation - Final Report

Table 6.5 Valuation Details of Laboratory Equipment

Table 6.6 Valuation Details of Motor Vehicle

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 Ethiopian Engineering Corporation Fixed Asset Valuation - Final Report

I. INTRODUCTION

1.1 Background

Formerly the Ethiopian Construction Design and Supervision Works Corporation

(ECDSWCo) changed with the name of Ethiopian Engineering Corporation (referred to
as EEC or the corporation from now on wards) was established in 2015. The Federal
Government Public Enterprise Council of Ministers Regulation No. 365/2015 established
the corporation as a multi-disciplined engineering organization to provide professional
services in water and energy, transport, building and urban planning and related
disciplines.

The corporation was introduced by amalgamating the three former Public Enterprises,
viz. Water Works Design and Supervision Enterprise (WWDSE), Building Design
Enterprise, and Transport Construction Design Enterprise mainly provide engineering
consultancy services in the water, building, and transport sectors, respectively. As the
provision provides the opportunity to engage in related activities, the corporation
introduced other three units which make its business grow to six units. These units are
Water and Energy Sector, Geotechnical Sector, Construction Sector, Surveying and
Laboratory Center, Building and Urban Planning Sector and Transport Sector. The
surveying, geospatial and civil informatics and Research, laboratory and training units
are established as a center to provide support services for the business unit of EEC as
well as generate revenue from external markets.

Furthermore, by contentiously transforming itself, the corporation restructured as

Ethiopian Engineering Corporation (EEC) at this time. This reestablishment has the
intention to make the corporation to be an end-to-end construction solution provider in
water and energy, building and urban planning as well as transport and other related
disciplines. As a result, the corporation’s business units reached seven business units by
introducing a construction sector in addition to the previous six business units.

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 Ethiopian Engineering Corporation Fixed Asset Valuation - Final Report

Therefore, the corporation has transformed itself into a full-fledged end-to-end

engineering solution provider organization with two business streams, consultancy and
construction. The newly established strategic plan also directs the corporation to engage
in the property management sector and other feasible diversified business sectors.

To this end, the former Ethiopian Construction Design and Supervision Works
Corporation (ECDSWCo) through its letter Referenced No. ኢኮዲሱሥኮ.34/135/2016 dated
on መስከረም 24/2016 E.C. commissioned the Industrial Parks Development Corporation-
Industrial Projects Service (IPDC-IPS) undertaken valuation of fixed assets based on the
main agreement and the EEC request to be revised by supplementary agreement for
Main Office and its subsidiaries including Water and Energy Sector, Geotechnical
Sector, Construction Sector, Laboratory and Surveying Center located at main Office in
Bole Sub city Wereda 05 around Imperial Hotel. Building and Urban Planning Sector
found in Nifas Silk Lafto Sub city wereda 7, the way to Saris and Transport Sector
located at Kirkos Sub city wereda 06 nearby Mexico and “Lamberet” site, Yeka wereda
09 in Addis Ababa.

This Final Valuation report is, hence, prepared by IPS as per consultancy agreement
concluded between the parties.

The report is organized in six sections, following this introductory part is location &
description of the asset to be valued provided in Section 2. Section 3 deals with definition
of values followed by the valuation methodology in Section 4. Caveats used in the
valuation and summary of the valuation results are provided in Sections 5 & 6
respectively. Detail information gathered for the valuation works are provided in
Appendix part of this report provided in …. Separate Volumes.

1.2 Objective of the Valuation

The overall objective of the consultancy Service is to determine the current realistic
Depreciated Replacement value (DRV) and open market value (OMV) of the fixed assets
of the Ethiopian Engineering Corporation (EEC) based on International Valuation
Standard (IVS).
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 Ethiopian Engineering Corporation Fixed Asset Valuation - Final Report

1.3 Scope of the Valuation

The valuation covers asset verification, condition assessment and determination of
realistic current value of the assets that include: building & civil works; heavy duty
machinery; geotechnical, Soil fertility, water quality and material laboratory, surveying &
geotechnical engineering equipment and motor vehicles that are located in Addis Ababa
and other project areas in the country.

2. LOCATION AND DESCRIPTION OF THE ASSET

2.1 Location of the fixed asset

The Fixed Asset is found main Office including Water and Energy Sector, Geotechnical
Sector, Construction Sector, Surveying and Laboratory Center in Bole Sub city Wereda
05 around Imperial Hotel. Building and Urban Planning Sector found in Nifas Silk Lafto
Sub city wereda 7, the way to Saris and Transport Sector located at Kirkos Sub city
wereda 06 nearby Mexico and “Lamberet” site, Yeka wereda 09 in Addis Ababa.

2.2 Land
The total area of land under the holding of the Corporation is 45,893.50 square meters
(4.59 hectares) found at the locations stated above. Table 2.2 below depicts title deed
number of the holdings, location, and total area of holding at each location and lease
values of the holdings
Table 2.2: Land holding of the client by Location & Area
S N. Title deed Location Permitte Total Price /m2 Total lease Remark
No. d Area Value in
Use (m2) ‘000 Birr
1 ቦሌ5/11/6/21/2 Bole wereda 05 - Government
14,469 130,000.00 1,880,970
3375/10988/0 office land
2 use
2 ዴ1/24311/182 Nifas silk wereda Commercial
29/70777/02 7 20,962 100,000.00 2,096,200

3 AA00004060 Kirkos cad.B. Organization 4,937 150,000.00 740,550

1162 06
4 የካ/ Yeka wereda Commercial 5,526 70,000.00 386,785
219798/11 09
Total 45,894 5,104,505

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 Ethiopian Engineering Corporation Fixed Asset Valuation - Final Report

Since land is proclaimed public property as per FDRE proclamation, we have not taken
any value in respect of the land in to account for the purpose of this valuation.

2.3 Buildings and Civil Works

The assets treated under this study comprise Fixed Asset found in Bole sub city Head
quarter Office, in Nifasilk Lafto Sub city BDE Compound, Yeka Sub city around Lambert
and Kikos Sub city Mexico compound in Addis Ababa.

The Corporation building and associated civil work asset valuation work conducted for
recently merged three government organizations with their former name has described
here under:-

1. Water & Energy main office located at Addis Ababa Bole sub city with additional
property around lambert area.
In Valuation of Water & Energy considers internal renovation works at some floors of the
three main buildings and all floors of the laboratory building.

The items of the renovation work is mainly removing the existing floor finishes, doors,
partitions & sanitary and electric fixtures and changing it with gypsum ceiling, gypsum
board partition wall, Metal Frame 10mm Tempered glass doors & Window doors, High
quality porcelain floor tile, Non slippery ceramic floor tile & ceramic wall tiles for wet
areas, Sanitary Fixtures, Lighting fixtures etc.

The building has data, fire security system installed in addition the buildings has 200m
deep ground water borehole but the submersible pump installed is not functioning and
may be it needs to be changed or maintained.

2. Construction Design & Supervision Enterprise Building main office located at Addis
Ababa N/S/Lafto Sub City
Valuation of Building considers internal renovation works of studio 4 using Metal Frame
Tempered glass doors, doors & Window, quality porcelain floor tile, Sanitary Fixtures,
Electrical fixtures, Non slippery ceramic floor tile & ceramic wall tiles wet areas, and only
for Studio 4.
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 Ethiopian Engineering Corporation Fixed Asset Valuation - Final Report

3. Transport Construction Design Enterprise main office located at Addis Ababa

kirkos subsidy
Valuation of Transport Construction Design considers internal & external renovation
works of the main buildings. The items of the renovation work is mainly removing the
existing floor finishes, doors, partitions & sanitary and electric fixtures and changing it
with aluminum doors, partition, porcelain & PVC floor tile for offices, sanitary & electrical
fixtures, Non slippery ceramic floor tile & ceramic wall tiles for wet areas. The building
has data and fire security system and external aluminum Panel wall cladding.

Conditions of the building and associated civil works are shown in the table below:-

Table 2.1: Condition of Buildings and Civil Works

Item
Description Condition
no.

1. Water & Energy DSWS.

1.1. Head Office
A- Block-1 Building
1- Main Building B+G+6 (Block - 1)
Basement Floor: (Electrical room, Tele room, lobby, stairs,
1.1 corridor, Ramp, Circulation Area, car parking, , ground
reservoir pump house) Excellent
Ground floor : (Shops, Lobby, Corridor, Toilet, Utility room,
1.2
Stairs) Excellent
First floor : (Shops, Lobby, Corridor ,Toilet, Utility room,
1.3
Stairs, bank strong room) Excellent
1.4 Second floor : (Offices, Lobby, Toilet, Utility room, Stairs,) New
1.5 Third floor : (Offices, Lobby, Toilet, Utility room, Stairs,) New
1.6 Fourth floor : (Offices, Lobby, Toilet, Utility room, Stairs,) New
Fifth floor : (Offices, Lobby, Toilet, Utility room, Stairs,
1.7
library, store) Excellent
1.8 Sixth floor : (Library, lobby, utility room and stairs) Excellent
1.9 Roof floor : (,lobby, utility room and stairs) Excellent
1.10 Technical floor : ( Mechanic room and stair) Excellent
B- Block-2 Building
1- Main Building B+G+6 (Block - 2)
1.1 Basement Floor Parking, lobby, store, stair and Excellent

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 Ethiopian Engineering Corporation Fixed Asset Valuation - Final Report

ground reservoir& pump room

Ground floor : Office, lobby, toilet, janitor room, stairs,
1.2 entrance hall, Internal & External corridor frontage, Entrance
Steps Excellent
First floor : Office, Lobby, Toilet, Janitor room, stairs,
1.3
corridors Excellent
Second floor : Office, Pool Office, Lobby, Secretary, Toilet,
1.4
Janitor room, stairs New
Third floor : Office, Lobby, Toilet, Janitor room, stairs,
1.5
Conference room New
1.6 Fourth floor : Office, Lobby, Toilet, Janitor room, stairs New
1.7 Fifth floor : Office, Lobby, Toilet, Janitor room, stairs Excellent
Sixth floor : Office, Lobby, Toilet, Kitchen, Stairs, Terrace,
1.8
Store Excellent
C- Block-3 Building
1- Main Building B+G+6 (Block - 3)
Basement Floor: (Electrical room, Tele room, lobby, stairs,
1.1
corridor, ,car parking, , ground reservoir pump house) Excellent
Ground floor : (Shops, Lobby, Corridor, Toilet, Utility room,
1.2
Stairs) Excellent
First floor : (Shops, Lobby, Corridor, Toilet, Utility room,
1.3
Stairs, bank strong room) Excellent
1.4 Second floor : (Offices, Lobby, Toilet, Utility room, Stairs,) Excellent
Third floor : (Offices, Pool Offices, Lobby, Toilet, Utility
1.5
Room, Stairs) Excellent
Fourth floor : (Offices, Pool Offices, Lobby, Toilet, Utility
1.6
Room, Stairs) New
Fifth floor : (Offices, Pool Offices, Lobby, Toilet, Utility
1.7
Room, Stairs) New
Sixth floor : (Dead File Storage, Lobby, Utility Room and
1.8
Stairs) Excellent
1.9 Technical floor : Mechanic Room and Stair Excellent
D- Building Electro Mechanical Systems
1 Schindler Lift Excellent
2 Ground Water Borehole with Casing Excellent
3 Submersible Pump Q=9lit/sec Scrap
4 Fiber Glass Domestic Water Tank Excellent
5 Fiber Glass Domestic Water Tank Excellent
6 Fire Pump Excellent
7 Electric Driven Domestic Water Pump Excellent
8 Fountain Water Pump Excellent
E- Laboratory Building G+1
1- Laboratory Building G+1 (Block - 5)
1.1 Ground floor : Corridor, Toilet, Testing room, Stairs, New

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 Ethiopian Engineering Corporation Fixed Asset Valuation - Final Report

Office, Toilet
First floor : Corridor, Toilet, Research room,
1.2
Stairs, Office, Toilet New
1.3 Roof Chemical Store, Laundry & Stair. New
F- Other Buildings
1- Transformer House G+0 (Block - 7)
1.1 Transformer, Generator & Distribution Board House Excellent
2- Guard House G+1
2.1 Ground Floor Excellent
2.2 1st Floor Excellent
3- Guard House G+0
3.1 Guard House Excellent
4- Soil Preparation Lab
Soil Preparation Laboratory Store, Office &
4.1
Laboratory House. Excellent
5- EGA Sheet Store G+0
5.1 EGA Sheet Store (Two Store & Two Offices) New
6- Toilet & Shower G+0
6.1 Toilet & Shower Good
7- CIS Guard House
7.1 CIS Guard House at Back Gate Fair
G- Site Work
1- Fence
1.1 Masonry & HCB Fence Good
1.2 Masonry & RHS Fence Good
1.2 RHS Fence Excellent
2- Metal Main Gates
2.1 RHS Frame Gate (Front) Excellent
2.2 RHS Frame Gate (Side) Excellent
3- Oil Changing Pit
3.1 Pit Holes Good
4- Paved walk Way
4.1 Paved RC Walk Way Good
5- Green Area
5.1 Green Area Good
1.2- Lambert
A- Other Buildings
1- Residence Building G+0
1.1 Residences G+0 (Korea) Fair
2- Different CIS Store Buildings
2.2 CIS Rooms Fair

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 Ethiopian Engineering Corporation Fixed Asset Valuation - Final Report

3- Assembled Metal Sheet Rooms

3.1 Assembled Metal sheet Rooms Good
4- Steel Watch Tower
4.1 Steel Watch tower Fair
5- Toilet G+0
5.5 Toilet Fair
6- Electric Distribution Board House G+0
6.6 Distribution Board house Fair
B- Site Work
1- Main Gate
1.1 Gate Excellent
2- Fence
2.1 CIS Fence (2m height) Poor
2.2 Wire Mesh Fence (1.8m Height) Poor
3- Water Tank
3.1 3m3 Water tank and RC stand Very Good
3.2 5m3 Steel water Tanker 4mm Thick Fair
2. Building & Urban DSWS.
A- Building
1- Main Building G+3
Ground Floor Secretary, HR &
Property Admin., Sector Finance Service, HR Admin. &
1.1
Development Team, Personnel, Toilet, Janitor, Finance
Offices / Rooms /Halls Good
1st Floor Secretary, HR &
Property Admin., Sector Finance Service, HR Admin. &
1.2
Development Team, personnel, Toilet, Janitor, Finance
Offices / Rooms /Halls Good
2nd Floor Expeditor and office
Service, Secretary, A.A-2 Project Coordinator, Secretary,
1.3
Toilet, Janitor, Sector Resource Admin. Service, Supply
Property and Facility Admin. Tech Office / Rooms / Halls Good
3rd Floor Meeting Hall,
Reserves (Plan Archives), Radio, Tender, Toilet, Janitor,
1.4
Reserved (Personal Documents), Credit Association,
Auditor, Labor Union Offices / Rooms / Hall Good
B- Studios
2- Studios G+0
Studio 1 : Quantity Surveyors Team Office
2.1
Secretary, Toilet, Assembly, Offices Good
Studio 2: Meeting Hall, Legal Advisor, Staff Assistant for
2.2
CEO, Secretary, Toilet, Reception Good

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 Ethiopian Engineering Corporation Fixed Asset Valuation - Final Report

Studio 3: Project Program Management

2.3
Secretary, Toilet, Assembly, Offices Good
Studio 4: Virtual Studio
2.4
Reception, Offices, Pool Offices New
Studio 5: Structural Design
2.5
Secretary, Toilet, Offices Good
Studio 6: Planning & System
2.6
Secretary, Toilet, Assembly, Offices, Main Store Good
Studio 7: Building Work Process Office and Urban &
2.7 Regional Planning Design Office Secretary,
Toilet, Assembly, Offices Good
Studio 8: Correspondence
2.8
Secretary, Toilet, Assembly, Offices Good
Studio 9
2.9
Secretary, Toilet, Assembly, Offices Good
Studio 10: Urban Design Sub Process
2.10
Secretary, Toilet, Assembly, Offices Good
C- Other Buildings
1- Cafeteria, & Children Day Care G+0
1.10 Children Day Care & Cafeteria service and Counter area Excellent
2- Cafeteria Kitchen G+0
2.10 Cafeteria Kitchen, Store and office Excellent
3- Cafeteria Toilet G+0
3.10 Toilet For Cafeteria Good
4- Welding Technician & Store G+0
4.10 Welding Technicians & Store Fair
5- Auto Electric Shop G+0
5.1 Auto Electric Shop Good
6- Garage G+0
6.1 Garage 1 (Steel Structure) Excellent
6.2 Garage 2 Good
6.3 Oil Changing Pits Excellent
7- Garage Technicians Office
7.1 Garage offices Good
8- Laboratory
8.1 Laboratory Good
9- Toilet and Shower
9.1 Toilet For Garage and Laboratory Good
9.2 Toilet & Shower For Garage and Laboratory Good
10- Guard House
10.1 CIS Guard House at Back Gate Fair

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 Ethiopian Engineering Corporation Fixed Asset Valuation - Final Report

10.2 Guard house at the Main Gate Good

11- Assembled Steel Sheet Office
11.1 Assembled Steel Sheet Office Good
12- Different CIS Store Buildings
12.1 CIS Rooms Good
13- Generator House
13.1 Generator Room Fair
D- Site Works
1- Car Parking Shade
1.1 Car Shade 1 Excellent
1.2 Car Shade 2 Excellent
2- Asphalt Work
2.1 Triple Asphalt Surface Treatment Good
3- Walkway
3.1 Covered Walkway Good
3.2 Un Covered Walkway Good
4- Green Area
4.1 Green Area Good
5- Metal Main Gate
5.1 Back Gate Good
5.2 Front Gate Vehicles Good
5.3 Front Gate Pedestrians Good
6- Fence
6.1 Fence HCB Good
6.2 Fence HCB and barbed wire Good
6.3 Fence Metal & Mesh Wire Good
7- Brick Incinerator
7.1 Brick incinerator (2m * 2m) Good
8- Water Tanker
8.1 20m3 Metal Water Tanker With RC Structure Good
8.2 20m3 Metal Water Tanker Good
8.3 5m3 Fiber Glass Water Tanker Good
3- Transport DSWS.
A- Building
1- Main Building G+3)
Ground Floor: Laboratory, Lab. Technician, Operators,
1.1
Cashier, Toilet, Stairs Offices Office / Rooms /Halls New
st
1 Floor: Planning & System Sub Process, Project &
Program Sub Process, Contract, Legal and Tendering Team,
1.2
Resource Management service Team, Resource
Management Service, Deputy Chief Executive Office, Toilet,
New
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 Ethiopian Engineering Corporation Fixed Asset Valuation - Final Report

Stairs Offices / Rooms /Halls

2nd Floor : Road & Traffic Management Work Process
Executive Office, Bridge & Interchange Work Process
Executive Office, Bridge Supervision & Contract
1.3 administration Team, Road Work Sub Process, Road
Supervision & Contract administration Team, Road Study &
Design Team, Airport, Railways & Ports Work Process
Executive, Toilet, Stairs Office / Rooms / Halls New
rd
3 Floor: Finance service, A.A.C.R.A Projects Resident
1.4
Engineers & Experts, Toilets, Stairs Offices / Rooms / Hall New
B- Other Buildings
1- Cahier & Reception
1.1 Cashier, Reception, Secretary & Photocopy New
2- Soil Lab. Store
2.1 Soil Lab and Storage Excellent
3- Archive
3.1 Archive Good
4- Guard house
4.1 Guard house Good
C- Site Works
1- Fence
1.1 HCB Fence Good
1.2 Masonry & Steel Excellent
1.3 Masonry Fence Poor
2- Car Parking Shed
2.1 Car parking Shed Good
3- Asphalt Work
3.1 Triple Asphalt Surface Treatment Scrap
4- Brick Incinerator
4.1 Brick incinerator (1 pc) Good
5- Main Gate
5.1 Gate Excellent
6- Water Tankers
6.1 10m3 Metal Water Reservoir Good
6.2 Domestic Water Tank 5m3 Excellent
7- Green Area
7.1 Green Area Very Good
8- Container Cafeteria.
8.1 Container Cafeteria (not including the container) Excellent

2.4 Heavy Duty Machineries and Equipment

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 Ethiopian Engineering Corporation Fixed Asset Valuation - Final Report

The valuation of Heavy duty Machineries and equipment covers the following assets
based on inventory data which are provided by the client, physical and technical
assessments:-

a) Construction Machineries and equipment includes

 Bulldozer Power Plus

 Excavator Power PLUS
 Loader Power Plus
 Roller Compactor
 Jackhammer Power.
 Water Pump- Robin
 Bar Cutting Machine
 Rammer Compactor
 Concrete Vibrator
 Cutting Machine
 Welding Machine etc.

b) Geotechnical and water well drilling RIGS & machineries

 Truck Mounted Rig

 Trailer
 Skid Mounted

2.5 Surveying and Laboratory Equipment

a) Surveying Equipment

Surveying equipment valuation is undertaken as per the Inventory asset list on 2015 E.C
report and verified on physical assessment. The assets under consideration in this study
include surveying equipment such as theodolite, total station, GPS, and other items

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 Ethiopian Engineering Corporation Fixed Asset Valuation - Final Report

found in various Ethiopian Engineering Corporation projects, including the Addis Ababa
Corridor projects, the head office next to the “Emperial” Hotel, and the “Lamberet”
previous water work design and supervision office.

The equipment on the project site is generally in good condition, although the majority of
the equipment in the Lamberet store is outdated but still functional.

b) Laboratory Equipment

Laboratory equipment valuation is covered based on given locations which are found at
Head Office, Water & Energy DSWS, and Building & Urban DSWS, Transport DSWS
and Laboratory, Research & Training Center. Those laboratory equipment’s are verified
during physical assessment and data are collected in order to determine their values.
The assets under consideration in this study including PH(ISE) meter, Geode 24 &
PEG40(Seismic Instrument), UV/Visible Double beam spectrophotometer, Dynamic
Cone Penetrometer Complete Assembly, Pin hole Dispersion app-550, Soil Drying oven
225 Cdm4, ADR 2000 slandered 2000kn compression machine with digital read out
220.24 v 50hz 1hp mvc 340mm mhc 275mm complete to fit slandered, Nitrogen Macro
Kjeldation pv pv-Distillation, 10Kn Flexural Tensile Machine, CBR Testing Machine 50KN
Test Speed 1.27mm (0.05) minute According to ASTMD 1883 Ashto T193 UNI 1009,
Computerized CRB testing machine (50KN), Huge Universal compression and
tensile(steel) testing machine, capacity,400000 lb, Concrete test Hummer Matest Modal,
Computerized complete set of Digital direct shear testing machine and so on.

2.6 Motor Vehicles

The motor vehicles are found at four sites of Ethiopian engineering corporation namely at
building construction design, transport construction design, head quarter and at ware
house compound which were too far away from each other. Physically inspecting the
vehicles, whose condition is more clearly stated in the appendices, and reached in to

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 Ethiopian Engineering Corporation Fixed Asset Valuation - Final Report

decision to estimate their re-sale values or market values, by assessing the market price
for the vehicles in the local market.

The basis for our valuation or re-sale valuation of the vehicles are the open market value
at which similar manufacturer, model, age, kilometer coverage and condition would have
been sold unconditionally for cash consideration on the date of assessment assuming a
willing seller, that prior to the date of valuation. There had been a reasonable period for
the proper marketing of the vehicles for the sale to be deducted that no account is taken
of any additional bid by prospective purchaser with special interest. Re sale price of
vehicles are an estimated value based on similar vehicles such as TOYOTA, NISSAN,
MITSUBISH, MAZIDA, ISUZU and the like pick up and automobiles those were
functional, at good condition, or dead and taking in to an account the daily inflation of the
dealer for such brands in the local market.

the type of vehicles are different in size, brand and condition along with some motor
cycles respectively those are now totally at operating condition except for some vehicles
those are now dead or stopped for long time due to shortage of spare parts, used for
long time and finished their service time and some of them were at work shop for
technical maintenance. The work done for estimation or market valuation of the below
stated vehicles were very exhaustive since they are found at four different places along
this most of them are found at different projects area or sites and hence, it totally
consumed almost one month to full fill the required parameters in order to get their
accurate value.

Finally some of the vehicles kilometers were not functional while the other one was not
known while they are at different project area or places. Hence, most of the outline
branch or project area vehicles are more or less similar to each other, in model, condition
and kilometer coverage and accordingly we determine their current price estimate at
local market.

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III. DEFINITIONS OF VALUES

3.1 Buildings and Civil Works

The Gross Replacement Cost (GRC) of a building is the estimated cost of erecting the
building or the modern substitute building having the same internal area as of that
existing and the ancillary site works together with the relevant professional fees and
other associated expenses directly related to the construction of the building and site
works.

The Depreciated Replacement Value (DRV) of a building / civil work is the Gross
Replacement Value (GRV), depreciated according to the condition factor.

Civil works that are not accessible for assessment and verification like sub surface lines
for electricity, sub surface drainage works and water supply system, are not directly
valued and their cost is estimated in percentage of the total cost for civil works. Land
scape works and biological assets are not included in this valuation. All measurements
are in m2 unless otherwise specified.

3.2 Heavy Duty Machinery, Laboratory & Surveying Equipment

The Gross Replacement Cost (GRC) of Heavy Duty Machinery & Laboratory &
Surveying Equipment are the costs of acquiring and/or installing new assets, or the
modern substitute assets having the same production capacity as the existing ones,
together with the associated expenses directly related to the installation of the assets.

The Depreciated Replacement Values (DRV) of Heavy Duty Machinery & Laboratory &
Surveying Equipment are the estimated costs of acquiring and installing the new or the
modern substitute assets having the same production capacity as the existing ones,
depreciated according to their condition factors. They do not necessarily represent the
Open Market Values (OMV) of the assets.

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The condition factor for plant, machinery and equipment, electrical equipment, and office
furniture and equipment is estimated by using sum of years depreciation method, details
of how the Depreciation Factors are estimated is presented as follows.

The points considered and procedures followed in arriving representative depreciation

factor which will be used in calculating DRV from GRC are:

 Determination of its theoretical useful life,

 Determination of its service life,

 Determination of its present conditions,

 Estimation of remaining life of service (ERL), and

 Determination of Depreciation factor (DF).

3.3 Determination of Theoretical Useful Life

The theoretical useful life of assets is the total life of service of the asset based on the
assumption that it has been and will be used and maintained as per the recommendation
of the suppliers of the assets.

In determining the theoretical useful life, effort has been made to assess the international
standard norms set for depreciation and appraisal of fixed assets. Most literatures give
useful life of 20 years; which is far beyond the prevailing condition of our country. The
above estimation is based on full capacity operation and 24 hours operation; which is not
the case in the Ethiopian Industry. Therefore in determining the useful life, practical
experience in the field and the prevailing (good standing examples) conditions industries
operating in Ethiopia were taken into consideration.

3.4 Determination of Service Life

The service life of the assets is the total life that the asset has provided the expected
service under proper operating and maintenance conditions. The service life of the

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 Ethiopian Engineering Corporation Fixed Asset Valuation - Final Report

assets in the subject was determined based on the information provided by the
corporation. The service life could be determined either on the date of purchase or the
date of commissioning; for the purpose of this valuation 2010 E.C was taken as date
Corporation started operation.

3.5 Determination of the Present Condition

Based on the information obtained from senior experts of the Client and inspection of the
asset in subject under operation or standing condition during site visit supported by
photograph (for future analysis), and current developments in the field, the study team
developed opinion on the present condition of the concerned assets and interpreted it in
condition rating; which in turn is used in arriving reasonable value for the economic
remaining life (ERL) as well as determination of the DRV.

Condition rating has been determined considering the physical, functional and
technological condition of the asset with new similar asset and the following benchmarks
have been used.

Condition Depreciation (%) CDF or CF

New 0-5 1.00 - 0.95

Excellent 6 - 10 0.94 - 0.90

Very Good 11 - 20 0.89 - 0.80

Good 21 - 50 0.79 - 0.50

Fair 51 - 60 0.49 - 0.40

Poor 61 - 90 0.39 - 0.10

Scrap 91 - 100 0.09 - 0.00.

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Each asset has been treated individually in the process of condition rating, but for the
sake of clarity when two or more assets were strictly identical it has been given an
average condition rating for the group or complete set.

3.6 Determination of Economic Remaining Life

Economic Remaining Life (ERL) of the asset is the life the asset in the subject will
operate normally and provide the output expected in the desired amount and quality
without replacement of its major parts. ERL has been established to each item based on
the factors discussed in the foregoing sections to represent its current physical condition,
maintenance condition, and working hours, technical and economic obsolesce, etc.

3.7 Determination of Depreciation Factor

The Depreciation Factor (DF) or Condition Factor (CF) has been estimated applying the
straight-line Depreciation Method, using the following formula.

D.F = ERL/ (ERL+N)

Where D.F: the depreciation factor,

ERL: Economic Remaining Life = C.F * S,

N: Age of the building and civil works or past service life,

C.F: Condition Factor gave during condition assessment,

S: Theoretical Service life of the buildings and civil works assigned at the very
beginning.

The condition factor for plant machinery and equipment for conversion of its GRC to
GRV is established based on the same principle discussed under section 3.5 by

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 Ethiopian Engineering Corporation Fixed Asset Valuation - Final Report

considering its completeness, physical condition, use for the desired purpose, and
obsolescence in comparison to its modern substitute but in the range from 1.00- 0.95 for
new assets and 0.20 – 0 for asset that is in poor condition. Assets lower than this value
will be considered as scrap.

3.8 Motor Vehicles

The Open Market Value (OMV) of motor vehicles means an opinion of the best price at
which an interest of property would have been sold unconditionally for cash
consideration on the date of valuation assuming:

 A willing seller;

 That before the date of valuation, there had been a reasonable period (having
regard to the nature of motor vehicles and the state of the market) for the proper
marketing of the interest and the sale to be concluded; and

 That no account is taken of any additional bids by a prospective purchaser with a

special interest.

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IV. APPLIED METHODOLOGY

The basis of valuation is the list of fixed assets provided by Ethiopian Construction
Design & Supervision Works Corporation. The valuation of the assets has been carried
out in the following three stages:

 Asset verification and conditions assessment;

 Data collection; and

 Estimation of the current values of assets.

Each stage of the valuation is discussed briefly as follows:

4.1 Assets Verification and Conditions Assessment

On the basis of the provided list of assets of the Client, the physical existence of the
assets has been verified through appropriate inventory. During this stage, various data
such as assets name, assets number, make, model, location, quantity, capacity,
acquisition price and year, plate number, dimension, etc. have been recorded as much
as the availability of information allowed.

For the purpose of the present valuation, the current conditions of the assets like plant,
machinery and equipment have been determined through detailed physical assessment.
A condition factor has been established to each item so as to represent its current
physical condition in the valuation. The depreciation factors or the condition factors vary
from 0.00 to 1.00. Scrap items are given the lowest condition factors and new items (if
any) are assigned higher condition factors; while the remaining ones are given condition
factors varying in between.

The valuation details along with the data collected during fixed asset verification of
building & civil works; heavy duty machinery; geotechnical, Soil fertility, water quality and
material laboratory, surveying & geotechnical engineering equipment and motor vehicles
are given in Appendices Table from 6.2 to 6.6, respectively.

4.2 Data Inputs of the Assets Valuation

The basic information used for the assets valuation is the price data (GRC) and historical
data of some assets from the Client.

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The Gross Replacement Cost (GRC) of Heavy construction machineries and equipment,
Surveying and Laboratory equipment; and vehicles had been obtained from quotation of
suppliers of similar new and second hand machineries and equipment, local agents for
similar machineries and equipment and offers obtained for new projects that has been
implemented and in the process of implementation. The price data for the items that are
scraped is collected from the foundries operating in the country.

The technology level, productivity of machinery available in the market is different from
the machineries installed in the factory, productivity has increased per unit machinery,
also unit of machinery cost has increased but on contrary investment cost and unit
production cost has decreased.

Therefore, the GRC index should incorporate the change in production capacity, foreign
currency change to replace the current machinery with the same production design
capacity of the major production machines and/or sections.

The GRC of service giving section workshop to meet the design capacity of the plant are
therefore calculated based on the average index of the section or the plant. An emphasis
is production/process machinery and equipment; the index is used to determine the GRC
of the whole plant.

4.3 Estimation of the Current Values of Assets

The assets involved in the valuation included building and civil work, plant machinery
and equipment, electrical equipment, furniture and office equipment and vehicle.

The valuation methodology used for each category of assets as presented in section VI
(definition of values) is Depreciated Replacement Value (DRV) method for plant
machinery and equipment, electrical equipment and workshop, laboratory, material
handling equipment.

The DRV is the product of GRC and Depreciation Factor (DF). The GRC is estimated by
using the market price data collected in a manner as discussed in section 3.2. The
machinery and equipment Depreciation Factor calculated using straight line Depreciation
Method as discussed in section 3.7.

The valuation details along with the data collected during asset verification of the
buildings and civil work; Heavy construction machineries and equipment, Surveying and
Laboratory equipment; and vehicles is given in Table from 6.2 to 6.6 respectively.

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V. CAVEATS

Our Valuations have been completed subject to the following caveats:

1) We have not undertaken a structural survey of any building and improvements

nor have we arranged for tests or inspections to be carried out on any of the
service installations.

2) The technical assessment was carried out from May 28, 2023 to June 12, 2024
GC. Any addition or deletion of the assets which might have occurred after the
completion of the technical assessment will not be part of the valuation
exercise.

3) We have assumed that all the assets are fit for the purpose for which they shall
be used and comply with all statutory and local bye-laws and regulations.

4) We are not aware of any proposed works which would affect the value of the
property.

5) We have assumed that there are no restrictive conditions that may be inserted
in any lease or title to the land that would adversely affect the value of the
property.

6) The building has been valued as if wholly-owned, no account being taken of

any outstanding monies due in respect of mortgage bonds, loans, finance or
other charges.

7) Any assets subject to lease hire or hire purchase agreements are valued as if
wholly-owned, no account being taken of any outstanding monies due in
respect of any agreements.

8) We have not taken into account any possible benefits from participation in any
national or international aid, loan, grant or similar scheme for which the Client
may be eligible.

9) We have assumed that the business will continue in operational existence for
the foreseeable future and that there is neither intention nor necessity to
liquidate or curtail significantly the scale of operation.

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 Ethiopian Engineering Corporation Fixed Asset Valuation - Final Report

10) We have assumed that foreign currency would be available at current

exchange rates for the purchase of imported assets.

11) We have not undertaken, nor are we aware of the content of, any
environmental audit or other environmental investigation or soil survey which
may have been carried out on the properties and which may draw attention to
any contamination or the possibility of any such contamination.

12) We have not carried out any investigation into past or present uses of the
properties nor of any neighboring land to establish whether there is any
potential for contamination from these uses or sites adjacent to the subject
properties and have therefore assumed that none exists.

13) Neither the whole nor any part of this valuation or any reference thereto may
be included in any published document, circular or statement or published in
any way without our written approval as to the form and context in which it may
appear and acknowledgment.

14) We have not arranged for nor carried out any mechanical or electrical tests for
assets that are not operational or dismantled at the time of asset verification,
limiting our examination to the outward physical appearance and to information
received as to the history and condition of the assets.

15) We have not made additional values in regard to such intangibles as patents,
rights to manufacture, trademarks, goodwill, going concern value.

16) We have carried out our valuation work based on client’s information, but we
are not subjected to any responsibility for those vehicles, which have no
license.

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 Ethiopian Engineering Corporation Fixed Asset Valuation - Final Report

VI. VALUATION RESULT

It is our opinions that as of our valuation revised date of April 12, 2025 GC, the total
Depreciated Replacement value (DRV) and/or Open market Value (OMV) of the building
and associated civil works, Construction Machineries, Laboratory and Surveying
equipment as well as Motor Vehicles of Ethiopian Engineering Corporation (EEC) as
more particularly described in this report and summarized in Table 6.1 below is Birr
2,977,712,381.91 (Two Billion Nine Hundred Seventy Seven Million Seven Hundred
Twelve Thousand Three Hundred Eighty One Birr and Ninety One cents).

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 Ethiopian Engineering Corporation Fixed Asset Valuation - Final Report

Table 6.1:Summary of Revised Fixed Asset Valuation As of April 12, 2025 G.C

Deprciated
Gross Replacement Open Market Value
Item No Discription of Asset Replacement Value
Cost (GRC) in Birr (OMV) in Birr
(DRV) in Birr
Table 6.2a Buiding and Civil Work 1,171,793,899.31
Table 6.3a Construction Machinery & Equipment 97,190,518.43
Table 6.3b Geotecnical,water well Drilling & mashineries 107,506,326.12
Table 6.4 Surveying Equipment 91,155,918.83 39,861,627.15
Table 6.5 Laboratory Equipment 49,514,374.59 28,384,010.89
Table 6.6 Motor Vehicles 1,532,976,000.00
Total 1,444,736,381.91
Grand Total 2,977,712,381.91

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Appendices

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