Twelve million quintals of cement, worth 90 million dollars, was imported by the ministry during the past year. This came to an end on February 8, 2010, because the state and private cement factories were expected to meet the local demand by producing at full capacity.
It was anticipated that those factories would not be affected by the power cuts that had plagued them during a significant part of 2008/09.
The government's imports had helped bring down the cost of cement from 400 Br to between 192 Br and 230 Br per quintal.
Two weeks after the Gilgel Gibe II Hydroelectric Power Plant was inaugurated, however, part of the 26km tunnel collapsed, and the factories are once again working for only half a day. This led to a price hike to between 300 Br and 315 Br per quintal, almost immediately. The price change was large but that would not go any further, because there is a three-month stock for government projects, including the construction of condominiums and 13 universities across the country, Arkebe said.
The government will also not import because it expects the Tana-Beles Hydroelectric Plant to be completed in 20 days' time, whereas it takes 90 days to deliver imports.
Cement factories are so dependent on power that, every time there is a cut, there is a price hike, according to Yeneneh Zewge, a trader around Gotera area in the Nefas Silk Lafto Disitrct.
Derba MIDROC Cement Factory, which will have a production capacity of 25 million quintals per year, will need 60MW of power, which currently is superseded only by the city of Addis Abeba.
Arkebe is unfazed by the problem that occurred at Gilgel Gibe II but says that with the completion of the maintenance of this tunnel and the Tana-Beles and Amertinesh hydroelectric plants, power failure will be history in Ethiopia.
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