The Chinese contractor Zhejiang Yefeng has resumed construction of the housing units for the employees of the Ethiopian Airlines (ET) after a two-year suspension of the project.
Zhejiang Yefeng suspended the construction following its disagreement with the management of Ethiopian and Ethiopian Airlines Employees Housing Project Association, after it had asked for additional payment for the project from the initial money it had agreed upon, stating escalating prices of construction materials as their reason.
The national carrier had launched the project, estimated to cost 1.5 billion Br, to the benefit of its 6,557 employees, of which almost half are working in management positions. In 2009 it had contracted Zhejiang Yefeng to build 2,502 housing units in two phases on a 313,000sqm plot, located in the Bole District, in an area known as Bole Beshale, a couple of kilometers away from Ayat Real Estate.
The plot, which had been acquired from the Addis Abeba City Administration (AACA) on a 99-year lease, is currently under use to erect a series of structures in the first phase, consisting of 1,192 housing units, with a 695.2 million Br payment for the Chinese company in a turnkey project. Construction commenced in 2011.
Ethiopian sources said that the Chinese company resumed work three weeks ago, after successful negotiations between the two sides. Dereje Tsegaye (Eng), housing project manager, confirmed the resumption of construction, but declined to comment on the details of the agreement with the Chinese contractor.
A month ago owner of the Chinese construction company met Tewolde Gebremariam chief executive officer (CEO) of Ethiopian, who has been approaching local contractors for the project, and explained the construction was halted because he had been sick. The owner also explained he wants to resume the project as his company really wants to work on the project to use it as experience for future projects in Ethiopia, according to a source.
On Thursday December 11, 2014, the association sent a letter to the members of the housing project to make total payment for the houses within a month from receipt of the letter. In 2011, employees signed a contract that compels them to stay with the company for five to 10 years, depending on the years of service provided, should they be interested in purchasing a house.
In the scheme, they paid 30pc of the total cost on the type of house they chose, while the remaining is intended to be covered by bank loans obtained through guarantees provided by the Company.
The resumption of the project brought some hope to those who had reservations about the contractor, as well as Ethiopian.
“We were supposed to have been handed over the houses by December 31 of 2014,’’ said a homebuyer.
The home buyers were not informed of the details of the deal, but were simply told to settle the payment, according to an employee who received the letter.
While the contractor halted the project, the management of Ethiopian was searching for finances to finalise the houses, including the Construction & Business Bank (CBB) and the Eastern & Southern Africa Trade & Development Bank a.k.a. PTA. It finally succeeded in securing a 22 million dollar loan from the PTA 18 months ago.
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