Oromia Roads Authority sues Berta construction, Awash Insurance


Oromia Roads Authority (ORA) sued Berta Construction Plc for 77 million birr claiming the latter failed to complete the construction of a 63 Km road in Ilu Aba Bora zone.
The Authority also sued Awash Insurance S.C. as a second defendant, as the insurance firm had guaranteed Berta Construction’s performance. ORA requests the firm to pay 10 million birr.
When disputes arose, the ORA and Berta Construction had initially agreed to resolve it through negotiating or by appealing to the Ministry of Urban Development and Construction before pursuing litigation according to the agreement the two parties signed. “However, due to the regulation by the Ministry of Finance and Economic and Development (MoFED) that prohibits governmental bodies from such negotiations, we filed charges against the company,” the Authority states in its charges.
According to the charges ORA sued the contractor because it did not complete the construction of the road on time causing the Authority to lose millions in cost overruns. The parties entered into a contract on June 27, 2005 for the construction the 71 million birr road which Berta agreed to complete and deliver within 1050 days. The construction was supposed to be completed by March, 7, 2009. The authority finally terminated the contract on January 12, 2011.
The contractor has only completed 51 percent of the construction, the Authority indicated in its charge.
Having terminated the contract between the two parties, the Authority hired another contractor, Alemayew Ketema General Contractor for the sum of 141 million birr to complete the construction.
‘If the defendant could have completed the construction on time, the Authority would not have had to spend an additional 69.6 million birr,’ the ORA statement indicated. 600 additional days were also required which has made things difficult for the people in the area who were supposed to have their road completed by now, the charge reads.
According to the Authority’s statement, it was paying 57, 996 per month to the consultant TOWERS Consult Plc. and as the consultant needed to serve additional 20 months due to the delay, ORA also claimed 1.2 million birr from Berta. In addition, ORA claimed 7 million birr, which according to their contract, the defendant should have paid when the contract was terminated.