Ethiopia is exploring the possible termination of its contract with the China State Construction Engineering Corporation (CSCEC) over a massive financial adjustment claim to complete the second phase of the Adey Ababa stadium in Addis Ababa.
The 62,000-seat stadium project was launched in 2015, and the first phase of the project was built at a cost of Br.2.47 billion.
Despite the fact that the second and final phase of construction began in late 2020, the contractor increased its cost adjustment by one-third from the initial agreed-upon budget of Br.5.5 billion.
As per the initial agreement, the government is not obliged to make cost adjustments but has tried to generously adjust the cost in view of the overall price escalation. However, the contractor has been accused of using every possible mechanism, including fuel price increases and buying more time, to request massive additional funds to complete the project.
Negotiations conducted with the Chinese embassy in Addis Ababa and the contractor had brought down the final completion cost to Br.14 billion from a high of Br.19 billion. However, the government still expects the project to be finalized with less than Br.13 billion.
According to information obtained by The Reporter Newspapaer, if an agreement is not reached, the contract will be revoked and another option will be considered.
Source: The Reporter
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