1 December 2018

Ethiopia: Unpaid Workers Hold Indians Hostage

Angered over unpaid salaries, local employees in Nekemte, Bure and Woliso towns, in Oromia and Amhara regional states, took seven Indian employees hostage on Sunday, November 23, 2018.

Khurram Imam, Neeraj Reghuwanshi, Sukhvinder Singh Khoker Chaitanya Hari, Bhaskar Reddy, Harish Bandi and Naggarju Bishu, all citizens of India, were taken hostage from camps set up for the construction of a 260Km road that connects Nekemte with Bure in Gojjam Zone. The construction has been underway since 2016 but has been stalled since last July.

The hostages, all employed by IL & FS Transportation Networks, are confined to different camp locations with four being held in Bure, two held in Woliso and one hostage near Nekemte. The hostages are allowed to move around within rooms inside the camps and but are prevented from leaving the camp.

The local employees, who claim to have not been paid wages totaling close to five million Birr for the previous month, are using the Indian employees to force the company to pay their salaries. The hostages have been writing emails to request help from Indian and Spanish officials. They are also tweeting their statuses and are requesting an intervention by Ethiopian authorities and international organisations.

Other Indian employees at the Nekemte camp have left the site, one at a time, with only one remaining hostage, according to an eyewitness.

"He was caught while trying to escape the camp at night," said this eyewitness.

The local employees are demanding their salaries be paid before they release the hostages.

"The day-to-day situation is worsening," tweeted one of the hostages, Neeraj Raghuwanshi.

It is not only the locals but also the Indians who have not been paid their wedges, according to the hostages.

"We have not received our salaries for the last five months," tweeted Sukhvinder Singh, another hostage.

Divided into three lots, the road that extends from Nekempte to Bure was awarded to two companies: two lots to IITNL-Elsamex Nekemte-Bure JV - a joint venture of IL & FS Transportation Networks and Elsamex S.A, a Spanish firm; and another Indian company, JMC Project India Limited, secured the third lot.

The joint venture of IL & FS Transport & Maintenance Limited and Elsamex won the two lots and signed the agreement with the Ethiopian Roads Authority on March 18, 2016. The companies were awarded the contract for the design, build and maintenance of the project for eight years.

The first lot, which is 86.1Km long and extends from Nekempte to Anger Gutin and Andhode, will cost 37.3 million dollars. The joint venture company was also awarded the third lot that extends from Agamsa to Bure, an 84.56Km section.

"We have not seen any construction activity at the site since last summer," a resident in Nekemte told Fortune. "The company has moved away all its equipment since last July."

JMC Project India is constructing a second lot of the project that has a length of 87.65Km and extends from Andhode to Agamsa.

The 86.1km Neqemte-Gutin-Andode road, the 87.65Km Andode-Agamsa road and the 84.5Km Agamsa-Bure road were awarded to the two companies for 21.4 million Br, 20.8 million Br, 24.6 million Br a kilometer, respectively.

"As the project owner, we are trying to mediate the two parties along with the regional state and the Indian Embassy," Samson Wondimu, public relations director at the ERA, told Fortune.

Discontented with the performance of the company, the Authority is on the final stages of terminating its contracts, according to sources close to the case. "A termination letter has already been issued but not delivered to the company," according to the same source.

The Authority's contract termination has led to the freezing of the company's account at the state-owned Commercial Bank of Ethiopia. The company cannot transfer funds from India as the Reserve Bank of India has imposed restrictions on the account of the company due to its mounting debts.

Attempts to discover the balance of the company's frozen assets at Commercial Bank of Ethiopia has failed as the communications head of the Bank did not answer either phone call or text message requests from Fortune.

This is also not the first time that IL & FS Transportation has been in trouble.

In a similar situation, in Nagaland, a state in northeast India, militants threatened employees in the area, while the company was working on a mega project constructing a two-lane highway. Rebel groups took away keys to equipment working in the area and demanded huge ransoms for the return of the keys.

Following the proceedings between the management of the company in India, Ethiopian authorities and the Indian Embassy in Addis Abeba, payment is promised to be settled this week, according to a person familiar with the negotiations.

Officials from the Indian Embassy in Addis Abeba were not immediately available for comment.

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