Ethiopian Review

Nori-la Engineering and Construction Share Company, a joint venture by Chinese giant Norincon and Ethiopian Lalibela construction companies, is undergoing a liquidation process after it suffered repeated losses from its operations.

A senior official of the company, who didn’t want to be named, told Capital that the decision came after a consensus was reached between the two sides’ shareholders to dissolve the company at an extraordinary meeting held on April 27, 2009.

Nori-la was established on September 1, 2004 as a joint venture between the Chinese-government owned Norincon Construction that controls 51 per cent of the company and Lalibela Construction Company, whose majority shares are owned by the Ethiopian Ministry of Defence.

“The joint decision came after the company suffered huge losses from the very beginning. As a result, most of the 10 projects it was working on, mainly contracted by the Ethiopian Ministry of Defence, are closing as we speak,” the official explained. “We are expecting that the liquidation process will be finalised at the end of this year.”

Established with an initial capital of 287 million birr, the company is now undergoing a sale of properties to aid the liquidation process. “I can’t tell you how much its current capital is, but evaluations to know it are underway,” the official said, adding that all the compensation required for laid off employees will be made effective.

The company, which is registered as a Grade 1 construction company, used to have more than 300 permanent employees at its headquarters, while there were more than 1,000 permanent and temporary employees at its project sites.

Nori-la was the biggest joint venture between Chinese and Ethiopian construction companies.
“There is a huge market for construction companies in Ethiopia, especially for big ones like Nori-la. I cannot explain what went wrong with the company because I stayed in the firm for less than a year,” Capital’s source added.

Capital witnessed that some companies working with Nori-la and its employees are already settling their cases.

The Ethiopian Insurance Corporation (EIC) has issued a statement on the notice board of the company that it will no longer provide credit medical services for the company’s employees, citing unpaid insurance premiums as the reason.

Among the projects the company was undertaking was the 20 million birr Modjo dry port construction.

- By Elias Meseret | Capital Ethiopia