Thursday, March 12, 2009

Ethiopia: Chinese company warns to pullout

Andualem Sisay, AfricaNews reporter in Addis Ababa, Ethiopia

Chinese Bridge and Road Corporation (CRBC), a local subsidiary of a state-owned Chinese construction firm, has warned Addis Ababa Road Authority that it will stop work on three major new roads unless it is paid for past projects.

CRBC Addis Engineering served the notice to the Addis Ababa City Administration Urban Development and Works Bureau. It asked them to take immediate action so that the road Authority can release their payment before March 20, 2009. The notice said if the Addis Ababa Road Authority failed to pay the money, CRBC will immediately stop construction of three major roads at hand.

Currently, CRBC is undertaking three road construction projects in Addis Ababa, which totally costs over USD$40 million. CRBC indicated that the rising cost of construction materials, combined with the failure of the authority to free the project sites from the ownership claims, has delayed the projects and put a stress on the company’s finances.

The Addis Ababa Road Authority failed to pay around USD$13.5 million (148 million Birr) to CRBC for finalized phases of the project before the deadline of March 2, 2009. CRBC claims it owed close to USD$8 million (83 million Birr) for phases already completed and the balance for ongoing projects.

According to the warning letter, in Ethiopia, CRBC has successfully completed nine projects and another seven are suffering delays due to mainly site possession problems.