Defective Construction by Chinese Firm Upsets Ethiopian Employees

The company constructed  1,192 housing units

Design mismatches, cracked and unfinished walls, broken and fissured tile work, unsealed doors, leaky ceilings, inappropriate plumbing, peeling paints and a myriad of other problems are facing Ethiopian Airlines employees who bought homes through an employer-sponsored scheme.

In a 60pc – 40pc sharing scheme between the airline and its employees, Ethiopian delivered 1,192 houses, constructed for 1.5 billion Br to its homeowners on July 24, 2018.

The four-year-long delayed project was constructed by the Chinese contractor, Zhejiang Yefeng Construction Ltd on a 310,000sqm plot of land in Bole District.  The area is known as Bole Arabsa, and is located a couple of kilometres away from Ayat Real Estate.

The Airlines covered 60pc of the cost of the project in a loan arrangement with its employees. The employees will repay the loan over 15 years through deductions from their salary along with a 9.5pc interest rate. The handover ceremony of the homes was held at the site in the presence of the home buyers, their families and the company’s senior management. The apartments are constructed in four different design types of one to four-storey buildings.

“All of our employees deserve to have safe shelter, as they are hard workers,” said Tewolde Gebremariam, Group CEO of Ethiopian Airlines, during the ceremony.

The national carrier had initially launched the project as a benefit for its employees, assigning half of the homes to those working in management positions. In 2009, the airline contracted Zhejiang Yefeng to build the 1,192 housing units in a turnkey project and secured the plot from the Addis Abeba City Administration on a 99-year lease contract. Construction commenced in 2011 with the promise of handing over the houses by December 31st of 2014.

The new home owners have been sharing their discontent with the homes and have been complaining and listing multiple problems, including unfulfilled commitments regarding necessary infrastructure for roads and water supply, as well as design mistakes and defective structural and finishing work.

However, the beautifully designed and coloured promotional brochure prepared by the Chinese company, Institute of Architecture Design & Research Chinese Academy of Science, painted a different story. It declared that the company committed “to construct quality houses as well as all other facilities.” And then it goes on to list the features of the proposed houses, among which is the landscape, where “30pc of the total plot size is covered by trees, shrubs and grasses.”

The promotional video, prepared by Ethiopian Airlines, shows not a single tree, shrub or blade of landscaped grass area evident on the site.  Indeed, a spattering of weedy grasses are shown growing across the barren landscape.

“The engineering and the actual design completely differ,” said one of the employees who spoke to Fortuneunder the condition of anonymity, “especially the roofing.”

The same brochure that was initially delivered to the homebuyers outlines that the roofing of the houses will be furnished with wooden trusses and pre-coated sheet metal. The finished roofs are only covered with pre-coated sheet metal without the wooden trusses. The roofs and gutters of some homes already have water leaks. There are units with peeling paint and damaged floor tiles. Fortunewitnessed these defects during a site visit.

“I can say my house is unfinished,” said one of the homeowners, who was cleaning the interior in order to move in before the approaching Ethiopian New Year. “The wall needs to be repainted.”

“For this, along with some finishing work, I am subjected to additional costs,” he added.

The development dubbed “Ethiopian Village” also has water supply shortages. The main source of water supply to the development is a water well dug during the construction process.

“As the city water authority informed us about shortages of water supply, we have temporarily connected the pipeline with the water well,” reads an announcement delivered to homeowners through their Association on July 2, 2018.

“Tough laboratory tests assured us of the cleanliness of the water, but it is better if you boil it before use,” reads this announcement,  signed by Messay Shiferaw, chairperson of the association. “This is mainly because the area has intense human and construction activities.”

Beyond the infrastructure, the home buyers also raise concerns over the fairness of home allocation.

Some months ahead of the delivery of the homes, the company held a raffle at the premises of the Ethiopian Civil Aviation Academy. At that allocation, it is alleged that all of the executives and part of the middle-level management members took houses of their choice without going through the raffle process, according to sources close to the case. Couples, who were previously included in the beneficiary list and saving for the past years, were finally denied their homes with the explanation that only one members of the same family can obtain a unit, according to same sources.

The more than 70-year-old company has pledged to construct an additional 11,000 units under phase two of its project. This construction could cost the company, which generated 233 million dollars in profit last year, close to 20 billion Br. The company, with 16,002 employees as of January 31, 2017, is in the process of selecting a company that will engage in construction of the homes under phase two of the project.

Anliey Eshetu, corporate communications director of the company, did not respond to Fortune’s email inquiry by the time this newspaper went to print.


Published on Aug 11,2018 [ Vol 19 ,No 954]



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