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Suspension of Project1

The contractor is temporarily suspending work on two road rehabilitation projects due to issues obtaining quarry sites from local residents and delays in payment from the employer. The contractor has been unable to access quarry sites needed for construction materials despite efforts over many months. Additionally, the employer has not made payments since December, putting the contractor in a difficult financial position. As a result, the contractor can no longer perform its obligations and is suspending work until the payment and quarry issues are resolved.

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156 views3 pages

Suspension of Project1

The contractor is temporarily suspending work on two road rehabilitation projects due to issues obtaining quarry sites from local residents and delays in payment from the employer. The contractor has been unable to access quarry sites needed for construction materials despite efforts over many months. Additionally, the employer has not made payments since December, putting the contractor in a difficult financial position. As a result, the contractor can no longer perform its obligations and is suspending work until the payment and quarry issues are resolved.

Uploaded by

omar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Date: 21/04/2015

Ref.No.ETHAC/ERA/228/2015
To:

Ethiopian Roads Authority


Addis Ababa

Attn:

The Director General

Re:

AGEREMARIAM YABELO ROAD REHABILTATION PROJECT


&
YIRGACHEFE AGREMARIAM ROAD REHABILITATION PROJECT

Subject:

Temporary Suspension of Work

Dear Sirs,
This refers to our various discussions and attempts made to draw your kind attention for the
problems related to the possession of quarry sites, which was officially requested to your good
office via our letter ETHAC/BC/188/2013 dated 21/10/2013 and also issues related to delay in
releasing payments.
In relation to the Possession of the quarry site and commencing the production of crushing
activities for the use of base course, asphalt and concrete works, yet the Contractor could not yet
possessed the cleared site (especially for the safety zone areas); despite the extended efforts
made by the contractor. Sadly, all of our efforts and attempts to resolve the issues for the sake of
the progress of the project is being fruitless.
Be informed that the problem related to crushing activities reaches its peak, and for instance on
the date of 31th March 2015 the local people residing near to the quarry area blocked the access
road to the quarry site and even stopped the government officials who were there to negotiate
with them for clearing their properties from the safety zone. Besides, the local residents
prohibited us to enter to the quarry area and all our equipment and properties, listed in the
attachment, are under their custody. The situation now is being far beyond the Contractors
ability to deal with it and even being dangerous for the safety of our staff considering the verbal
threat made by locals who carry arms.

Note that among those equipment and properties found under the locals custody, there are two
drilling machines, which unfortunately one of it belongs to the Ageremariam yabello project,
and in consequence, the drilling works of this project has been stopped completely. In view of
such situation, the mobile crusher found in this project stopped and thus our attempt to complete
the project is highly affected by the shortage of crushed base course and asphalt aggregate.
While the contractor is struggling with the quarry issue, to make situation even worse, the
Employer has stopped releasing our payment starting from December 2014 till now, for
Ageremariam Yabello project; giving informal reasons that the project uses its budget already
allotted by the Financer.
In view of the delay of the payment, the Contractor is unable to undertake his contractual
obligations as required in the contract; even getting difficulty to the extent of effecting payments
to the daily demands of the project, mobilize resources, effecting payments to the subcontractors, purchasing construction materials and paying salaries to our staff. Be kindly notified
that the delay in payments put us in huge cash flow problem.
In relation to the payment delay and its consequence, please draw your kind attention to Subclause 69.4 of the General Conditions of the Contract, which states Without prejudice
to the Contractors entitlement to interest under Sub-Clause 60.10 and to
terminate under Sub-Clause 69.1, the Contractor may, if the Employer
fails to pay the Contractor the amount due under any certificate of
the Engineer within 28 days after the expiry of the time stated in SubClause 60.10 within which payment is to be made, subject to any deduction
that the Employer is entitled to make under the Contract, after giving 28
days prior notice to the Employer, with a copy to the Engineer, suspend
work or reduce the rate of work. If the Contractor suspends work or reduces
the rate of work in accordance with the provisions of this Sub-Clause and
thereby suffers delay or incurs costs the Engineer shall, after due
consultation with the Employer and the Contractor, determine:
(a) any extension of time to which the Contractor is entitled under Clause 44, and
(b)the amount of such costs, which shall be added to the Contract Price, and shall notify
the Contractor accordingly, with a copy to the Employer
To this effect, the Contractor is no longer able to perform his obligation and intends to suspend
the project till such time as the withhold payments be released and issue of the quarry sites are
resolved.

This is, therefore, to regrettably inform your good office that the Contractor is forced to suspend
the progress of the two projects temporarily to mitigate our continuous losses and to give the
concerned authorities the chance to solve the issues related to the quarry sites and also payment
issues; without prejudicing our contractual right to claim for the consequential damages
Please treat these issues as a matter of urgency; for the sake of the smooth and early completion
of the project.
Sincerely Yours,
Eng. Yasser Bakir
Managing Director
Attachment:- Letter ref. ETHAC/BC/188/2013
- Rented Equipment Owner Letter
- List of machineries being idle
- List of manpower being idle

CC: Ethiopian Roads Authority


Southern Region Contract Management Directorate, Director
Addis Ababa
Gauff Ingenieure
P.O. Box 9428
Addis Ababa
Ethiopia
BEZA Consulting Engineers Plc
Bole Hora Adminstration

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