Ethiopia: Afro-Tsion Repairs Faulty craftsmanship on employee housing

The company employs 120 professionals to repair the defects

Afro-Tsion Construction, a company responsible for the construction of 1,192 houses for employees of Ethiopian Airlines, has begun repair work on defective workmanship and on activities that need to repair leaking roofs and broken and chamfered tiles.

To date, Afro-Tsion has booked 451 complaint claims, varying from minor electrical problems to building faults that cause leaking roofs. To tackle the repair problems, the company has deployed a total of 120 professionals.

"Prior to the transfer of the houses, all defects in the houses were recorded," reads a letter from the Board of Housing Project, signed by Messay Shiferaw, the chairman. "Because the repair of all defects can take a long time, we have agreed to refuse payments of the contractor's retentions to resolve the defects."

According to the management of the construction firm, retention payments and fees for another work amounting to 20 million Br have been withheld by Ethiopian.

The houses, delivered to homeowners on July 24, 2018, were built for 1.5 billion Br. Ethiopian raised 60 percent of the costs as loans to its employees and the remaining 40 percent was raised by the employees themselves. The loan amount must be repaid with an interest of 9.5 p.c. Over a period of 15 years, and monthly payments must be deducted from employee salaries.

"We have allocated 10 containers with materials, including ceramics, that can be used for repair work," said Tesfaye Misganaw, general manager of Afro-Tsion, a company that was founded two decades ago with a starting capital of 50,000 Br as a seventh grade . contractor.

The construction project was launched almost ten years ago when Zhejiang Yefeng, a Chinese construction company that has been operating since 1993, has received the turnkey project. The construction site is located on a plot of 313,000 m² in the Bole district of Bole-Arabsa and secured against the Addis Ababa City Administration on the basis of a 99-year lease. The construction started in 2011 with the promise of the delivery date of 31 December 2014.

The first 3D design of the houses was done by a Chinese company, Institute of Architecture Design & Research Chinese Academy of Science, but was later revised.

"We have contracted the houses on the basis of the design and specification that the airline has offered us by the time we have signed contracts," Tesfaye said.

After five years working on the project and having completed 25 to 30% of the houses, the Chinese company has stopped building activities. In 2015, Ethiopian issued another tender to complete the project. Six companies responded to the offer, including YOTEK Construction Plc, Flintstone Engineering, Tekleberhan Ambaye Construction (TACON) and Afro-Tsion Construction.

Afro-Tsion sealed the deal with the lowest bid of $ 23.1 million and a payment of 282 million Br, which means a discount of eight percent on the original bid price. Construction design S. Co was the on-site supervisor of the project.

Afro-Tsion has experience working at the Oromia Cultural Center, Airfields in Jinka and Semera, the Adama Branch Office of Awash Bank, the universities of Gondar and Jimma and the headquarters of the Addis Ababa Police Commission. Recently it won a contract of 1.4 billion Br to build the infrastructure for the Yirgalem Integrated Agro-Processing Industrial Park.

After terminating the contract with the Chinese company and allocating it to Afro-Tsion, Ethiopian increased the cost of the houses by 40 percent.

"When we took over the project, we implemented repair work worth 20 million Br," Tesfaye told Fortune.

Adjusting structures, repairing cracks and partially damaged buildings and installing sloping ramps were some of the remediation work carried out by the company, according to Tesfaye.

"We delivered the houses within two and a half years", Tesfaye said. "To meet our commitments, we have even suffered a loss of as much as 150 million Br."

In addition to the work specified by the project, the management of the company claims that they have done some work that is not in the contract document.

"We worked on drainage systems, paving and locks at our own expense," said Tesfaye, "we also covered the window sills with granite, while the agreement was with porcelain. [white translucent ceramic]. "

The finishing materials were imported from Italy, China and England, according to Tesfaye and installed by the suppliers companies that send their own technical teams to Ethiopia.

Afro-Tsion used 2.5 million stones during construction. The company bought two machines that can produce 12,000 bricks per day for 20 million Br. It installed three ground and an elevated water reservoir along with nine compact electricity stations with a capacity of 800-1,000 kva.

For the project, the company has spent 3,000 to 4,000 employees eight million Birr on nine million Birr in monthly labor costs, according to Tesfaye.

"It was 40% of the company's total payroll," he said.

The 70-year-old national airline is in the process of hiring contractors for another 11,000 units in phase two of the project with nearly 20 billion Br in investments. The company, with 16,002 employees as of January 31, 2017, is expected to announce the result of the offer, apparently dominated by Chinese construction companies.

Either Anley Eshetu, corporate communications director of Ethiopian, nor Messay responded to Fortune's research until the paper began to print.

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