Monday, May 09, 2011

Ethiopian, Indian companies spar over machinaries


By Muluken Yewondwossen, May 09, 2011
Karuturi Global, an Indian based agricultural company that recently lost part of its leased agricultural land is at the centre of a dispute between local investor and owners of construction machines on account of the condition of the machines leased. 

Karuturi, who received over 300,000 hectares in the Gambella regional state, had their land lease reduced by two-thirds to 100,000 hectare by the government for reasons that it is too big for a single company to manage but also to enable the annual migration of antelope.

Anhama Trading Plc, the Ethiopian based construction machinery rental company, and the Indian company are in dispute following three months of payments delay for machinery lease.

Habtamu Alemayehu, general manager and owner of Anhama, told Capital that the dispute arose when Karuturi’s officials said they would exclude the idle time payment from the total amount. “Due to this dispute we cannot claim over one million birr of a lease fee for over three months,” Habtamu said.

 “I cannot to settle my partners’ payment due to the delay of the total payment,” he complained.

Seven machinery owners, who transferred their construction machines from Anhama Trading for the lease of Karuturi projects, complained about the delay of their payment for over three months, starting from December 2010.

Last week the machine owners were in discussion about their payment with a Karuturi official at the headquarters of the company in Addis Ababa.

“The Karaturi official told us that the company’s highest official was in India, and he will solve the dispute, but we have not been offered any solution for now,” machinery owners told Capital in the past week.

“According to our deal the company should pay the total amount, albeit the machineries having stayed without activities,” he explained.

He said that according to the contract agreement and experience of earlier projects with the same company, the later ensures a minimum working time of eight hours per day, to avoid any breakdown or idling due to mechanical failure and climatic conditions that can delay the job.

Karuturi, one of the biggest foreign based agricultural companies in the country, has invested 100 million dollar in Ethiopia so far, and plans to have 65,000 hectares in production this year.

From March this year the Indian company has started to sell its maize product through the Ethiopian Commodity Exchange trading floor for local markets.

 The company, which is one of the major top agri-business companies in the world, is growing crops including rice, palm oil, sugar cane and cereals on its leased land.

Birinder Singh, head of marketing and logistics of Karuturi, told Capital recently that he doesn’t want to give any comment about the dispute between his company and Anhama Trading, but he said that his company is ready to discuss  the issue with the owner of Anhama.
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