diff --git a/lib/core/config.js b/lib/core/config.js
index c675c1e8..24f0ef9d 100644
--- a/lib/core/config.js
+++ b/lib/core/config.js
@@ -4,6 +4,8 @@ const Plugins = require('./plugins.js');
 const utils = require('../utils/utils.js');
 const path = require('path');
 
+const httpContractDir = '.embark/contracts/';
+
 var Config = function(options) {
   this.env = options.env;
   this.blockchainConfig = {};
@@ -188,8 +190,7 @@ Config.prototype.loadExternalContractsFiles = function() {
     }
     if (contract.file.startsWith('http') || contract.file.startsWith('git')) {
       const url = this.getExternalContractUrl(contract);
-      // TODO put directory name somewhere else
-      const localFile = utils.joinPath(process.cwd(), '.embark/contracts', path.basename(url));
+      const localFile = httpContractDir + path.basename(url);
       this.contractsFiles.push(new File({filename: localFile, type: "http", basedir: '', path: url}));
     } else if (fs.existsSync(contract.file)) {
       this.contractsFiles.push(new File({filename: contract.file, type: "dapp_file", basedir: '', path: contract.file}));
@@ -258,6 +259,7 @@ Config.prototype.loadEmbarkConfigFile = function() {
   }).map((dir) => {
     return dir.split("*.")[0];
   });
+  this.contractDirectories.push(httpContractDir);
 
   this.buildDir  = this.embarkConfig.buildDir;
   this.configDir = this.embarkConfig.config;
diff --git a/lib/modules/solidity/index.js b/lib/modules/solidity/index.js
index 2048b27d..424ab59d 100644
--- a/lib/modules/solidity/index.js
+++ b/lib/modules/solidity/index.js
@@ -1,6 +1,5 @@
 let async = require('../../utils/async_extend.js');
 let SolcW = require('./solcW.js');
-const path = require('path');
 
 class Solidity {
 
@@ -26,8 +25,6 @@ class Solidity {
                        let match = new RegExp("^" + directory);
                        filename = filename.replace(match, '');
                      }
-                     // TODO remove this and fix it
-                     filename = path.basename(filename);
 
                      file.content(function(fileContent) {
                        if (!fileContent) {