. POWER POWERCON Private Limited Company — ee JN ANAT POAT PVA TTUNC Yeka Sub City Kebele 11/12 House No909 — Tel. 0911-526656 — Addis Ababa, Ethiopia Ref. No.: - AKKRP/O2/1158/16, Date:- 20" of November, 2023 To: - The Resident Engineer Ze G &Y Engineering Consult PLC Ref:- Dabat-Keraker-Ketema Nigus Road Project; Contract 2:- Ajire-Keraker-Ketema Nigus Subject: - Regarding Draft Minutes of Meeting CC- ERA Gondar Project Management Office Encl: - 12 pages of draft minutes of meeting Dear Sirs, In response to your letter G&Y/Aj-Ke/167/23 dated November 16th, 2023, regarding the draft minutes of the meeting that was recorded at Gonder Area Construction Project Management Office on the assessment of security improvement and the possibility of resuming Project Activity, this is to provide you our comment on the recorded meeting after the site visit of the referenced Project on November 8 & 9, 2023. As a result, we have gone through and examined your record to determine if any additional comments or corrections are needed but is acceptable for final. Aside from the raised records, the site visit was also convoyed with military personnel across Dabat woreda, and an armed engagement between federal forces and rebels is still ongoing at approximately Km 22 and ahead. Meanwhile, the contractor will seek solutions to the apparent impossibilities that have been imposed on him. Your consideration on the Subject Matter is highly appreciated. Sincerely Yours, incerely Ves. 1 KS ce 4 The General Manager, Powercon ple, Addis Abeba + Project file, Ajire Tel-251-011-662-50-98/251-0930-01-40-43- Fax. 251-011-662-50-98a Gc yV ENGINEERING . ANE Deb O7eF CONSULT PLC 'WE GO ABOVE AND BEYOND ON EVERY JOB, PERIOD! Date: /6 / /, /20,23 Ref. No fe Lez To: Ethiopian Roads Administration (ERA) Gonder Area Construction Project Management Office Gonder, Ethiopia Re: — Consultancy Services for Continuation of Construction Supervision of Dabat Keraker — Ketema Nigus Road Project; Contract 2: Ajire — Keraker — Ketema Nigus Subject: Sending Draft Minutes of Meeting Dear Sir, Attached hereby please find Draft Minutes of Meeting which is record of the meeting conducted on November 10, 2023 at Gonder Area Construction Project Management Office, Gondar in respect of Resumption of Project Activities, for your review and comments if any. Sincerely yours, General 1 pages of Minutes of Meeting » POWERCON PLC in JV with Tesfaye Legesse Construction P Addis Ababa. Ethiopia re oho aPetppayeyge omunn raocwe op TE fis rom me theme hea i AG DA__ Ethiopian Roads Administration ‘Minutes of Meeting on Resumption of Project Activities _ _ Contract Details Procurement Ref. No. : | Constract Description: W/13/ICB/OC/GOE/2010 EFY | Consultancy Service for the Construction Supervision of Dabat-Keraker-Ketema Nigus Design and Build Road Project; Contract 2: Ajire - Keraker - ketema Nigus Funded By: Government of the Federal | Contract Value: Democratic Republic of Ethiopia | ETB: 1,158,659,797.00 (including 15% VAT) (FDRE) Employer: Ethiopian Roads Administration | Commencement date: September 21, 2018 (ERA) Contractor: POWERCON PLC in JV with | Contract duration: — 1095 Calendar Days Tesfaye Legesse Construction furs} Consultant: _G & Y Engineering Consult Pic. | Revised Completion date: November 25, 2023. Place, Date & Time of Meeting ‘Venue: Gonder Area Construction Project Date: November 10, 2023 Management Office, Gondar Time: 2:30 AM Participants Name Organization Position Signature Ato Daniel Nigusse ERA, Gonder PMO. Team Leader Ato YosefGoshu | ERA _ Senior Engineer ‘Ato Mesfin Kebede | ERA Project Engineer ‘Ato Mitiku Tefera. | G&YEngineering __| Assistant Resident Engineer Consult Ple. Ato Addis Getahun | POWERCON _ Project Manager ead ‘The meeting was held following the Employer's call for tripartite meeting; and, the purpose of the meeting is to discuss on pertinent project issues and actions required to resume the project activities. The following agenda are addressed during the discussions. 1. Introduction 2. Joint Condition Survey Required to Resume Project Activities 3. Right of Way Issues 4, Security Issues 5. Contractor’s Request for Financial Assistange 6. Conclusions and Summary of the Discus:Ethiopian Roads Administration ‘The particulars of discussions made on each of the above agendas are as follows; [ Item Nur | Issues and Discussions Action by 1 | Introduction The ERA, Gondar Project Management Office, Team Leader} All welcomed all the participants of the meeting and chaired the meeting. The team leader noted that about more than 5 months have | ‘been counted since the project closure due to security issues and the entire Contractor's and the Employer's Representative staffs have been idle. v The team leader briefly discussed that he has been mobilized | to the project site participants of the meeting and has conducted meetings on November 08 and 09, 2023 with the local administrations of Dabat Woreda and Tegede Woreda respectively. 2 | Joint Condition Survey Required to Resume Project Activities The Contractor Project Manager has reminded on the agreed precondition to resume of Project Activities from last meeting on July All 31, 2023. | > The PM has begun by addressing his point by inviting the participant by reminding the cause for cessation of the project and failed prevalence of secure environment to | execute the work facing continuous looting, robbery, | intimidation, harassment, physical assault etc usually | involving arms, which robe avenues to mobilize resources and execute the works unimpeded. From the notable causes and failed prevalence of justice including:- > Attack on contractor’s camp including the Project Manager. > Armed robbery, damage to vehicle and physical assault to the Contractor’s workmen. | > Looting from the Employer's Representative mess hall, Material robbery from Anssesa Bridge, construction raw materials robbery including fuel, cement and etc from | construction site, Radio communication device robbery, physical assault and robbery on different roadway section | especially at Aradie kebele including attack on the | Employer's Representative staffs, lawlessness and failed | legal protection of Contractor's staff. > Continuous road blockage and disruption following belated Row payment > Difficulty to mobilize and demobilize his resources from the |; project site > Forsuch, the Conyefor has reqiested for solid action on = > Establishment of secure environment for the well-being of the Contractor's workinen. | > Unhindered mobilization ands demobilization of resources, | > Resolution of oltstandin; tight® of way issues and NAN: ___ Page 2 of 11Ethiopian Roads Administration v vv v ag v Containment of individuals forceful stoppage of the works, and Partial recovery of the costs that the Contractor has incurred | including idle costs of resources, time related overhead costs and payment In connection with the meeting that was held on July 31, 2023 with the availability of all Stakeholders, the Employer was requested Dabat woreda and North Gondar zone to provide and come up with a mitigation proposal on how they fulfil their repetitive failed promises on handling of security problem which is the reason of cessation of the project. Task includes; How to recover stolen property How to bring killers and intruders to the law How to stop repeated street robbery and Remobilization of regional security forces to secure the project environment In general, the three parties requested, to get a proposal on how the Contractor can carry out the work without any security risk and disruption, and the later plan was to evaluate it together. ‘Accordingly, one of the aims of the site visit was to assess on such tasks that the woreda conducted and prevalence of secure environment is established or not. But, none of all has been witnessed so far according to our site visit. No one has brought to justice system and didn’t get their proposal as the Project Manager stated his opinion In summary, The project cessation on June 06, 2023 was a cumulative effect of two- or three-months lawlessness since January 2023 including cessation for more than 45 days starting from January 2, 2023 after an attack on Contractor's project’ manager, administrator and other staffs by a gunmen and such previous failed promises from the woreda has caused severe financial and time losses. Effect of repetitive cessation and remobilization to the project is still at risk and couldn’t assure when to resume the work without a solid effort from the woreda. On the other hand, the Second aim of the site Visit was to assess prevalence of secure environment, and checking of opened road corridors for Contractor's resource mobilization and smooth supply that result from armed conflict sprouted throughout Amhara region due to the on- going operations ensured by the government against rebel groups. Such is still ongoing since 05% August 2023 following the state of emergency declared by the Council of Ministers. For such, the general presumption about the project area by lessors and workmiery is.unfavourable and thus far we cannot be certain thél/sectire environment has been restored to resume progressing he Works Land Road corridors are still closed. Ve Sh Fe f 6 . Page 3 of 11Ethiopian Roads Administration Vv v Further to that recent operation around Km 22 between the government and the rebel groups hasn’t assured the resumption of the project with the prevalence of secure environment rather still several forces are still operating through the area. Most notably, the Project Manager has given emphasis on the impossibility of transporting Dynamite from Addis Ababa which will affect the overall crushing activity which is laid on the critical path of the project is at large and resumption of work is unthinkable and on land since public transportation is still closed. The employer raised on the possibility of purchasing goods from nearby area and will further communicate the command post on the possibility of arranging protective convey transportation together with defence forces presence for the construction raw material from contractors preferred resources. The Employer stated to focus on other works other than crushing until land transport for such convoy is permitted by the government offices. But the Project manager insisted project cost overrun and time related burden is high until the project is executed according to the approved work program, The contractor PM replied on the limited and scarce availability of construction raw material around Gonder and stressed out the criticalness of dynamite mobilization for Crusher. Aside from that the PM noted the possibility of ambushing the convoy in which the conflict is more of gorilla war type and noted the high risk and difficulty on resumption of work. However, the Employer stated that; The Woreda administration has started executing his assignments as discussed on July 31, 2023 to secure the working environment which is presented by the administrator at the project camp during site visit. In connection to this, the Woreda has assigned Ten (10) new security force members (Militia) on each Kebele in addition to the previous number of security forces who are responsible for preventing any illegal action by the local residents, robbery and theft. The general security condition én?and around 'the project area including Gondar town is safe And'secured. (Sis g The current armed movement|gn \thé xégidiv isnot related | over hastno experience with the project work and the Page 4 of 11Ethiopian Roads Administration v v a v any problem due to the current condition of the region even two projects (Beles-Mekanebirhan & Km 69+000- Angereb/Ashere) under Gondar PMO are active/engaged on their work. However, since the corridor from Addis Ababa to Gondar has been closed sometimes the Employer raised on the possibility of purchasing goods from nearby area and will further communicate the command post on the possibility of arranging protective convey transportation together with defense forces presence for the construction raw material from Contractor's preferred resources. To this end, since there is no fuel shortage on Gondar town, the Contractor shall take the responsibility to find the means | of transportation as how the town used and mobilize fuel, cement and goods for community consumption. In connection with Explosive transportation, it will be difficult to transport under this circumstance; however, since we have not requested the concerned Authority and could not get their response we couldn't decide on the situation. Hence, requesting the concerned authority is better and until that we can use the available balance on the project site. The Employer will settle the Right of Way issue either by effecting some amount of compensation or by communicating the concerned authority and property owners The Contractor's requisition of financial support by the Employer shall be administered through the Contract requirement. Hence, the Contractor can submit his proposal to the Employer's Representative. Therefore, the Employer has given his stress to resume the project work and all parties shall be performing their responsibility in line with the requirement of the Contract. The Contractor PM replied on the limited and scarce availability of construction raw material around Gonder and stressed out the criticalness of dynamite mobilization for Crusher. Aside from that the PM noted the possibility of ambushing the convoy in which the conflict is more of gorilla war type and noted the high risk and difficulty on resumption of work. ‘Thus far, it has been more than 5 months since the progress of the works ceased and the Contfactos’s resources attached herewith remain stranded exacérbating the alreddy inflicted financial standing of the Contfactdr..More. worrisome is the uncertainty when the Contractor may be able to resume the works or have idled resources ngved wutinclyding those Page 5 of 11Ethiopian Roads Administration v v y leas Contrary to any assertion or assurances that may be offered by the local administration regarding prevalence of enabling environment in and around the project area and unfettered movement of traffic to and from the project site to resume the works; the Contractor's assessment of the security situation in the broad area of the site and access thereto and ease of movement of goods and machineries to and from the project area gives a different picture. Most importantl * Sporadic engagement between government forces and rebels along the project access corridor and the site poses significant risk and would not warrant remobilization of needed resources and take out those that are no more required or lease agreements terminated, * Transporters would not wish to serve because of risks, they would not wish to assume in connection with the armed conflict for such risks are not indemnified by | insurers, | « Transport of dynamite is bitterly restricted thus production of surfacing aggregate, one of the key activity, shall remain ceased even if we could manage to have presence of certain resources on site. Cognizant of surfacing works are the main outstanding works, it would be futile to have all other resources without commencing production of surfacing aggregate, * The security situation is still volatile and uncertainties are abound. Under such circumstances and inconsideration of significant number disruptions we have had dealt with in the past, we do not have any more financial or moral contingency to absorb the consequences that may eventuate, * Absence of local police force to provide additional security to the project area like it had been in the past, wound mean we have to assume more risks than before while our standing has diminished because of vast number of traumatizing and derailing experiences we had been through, While the actual situation is as stated above, the local administrations assurance of maintenance of a secure environment to let remobilization commence must not be taken undoubtedly. Such assurances destiny of getting futile must not be ruled out since similar of them had ended uy futile. The Contractor is mindful that thé Security situation is. rf beyond the reasonable ability of the Idcal‘administration and? the overall _ security arrangement. yesourcing and |: deployment is under the conlyol\ofa:'commiand post established following state of cae declared. by the _Page 6 of 11v sg Ethiopian Roads Administration Council of Ministers in the Amhara National Regional State on5 August 2023. Mere assurance offered by the local administration must not overshadow the gravity of the problem and similar assurances offered by the local administration in the past have always failed to pass the test of time, and hence the latest assurance seems hasty and the likelihood of exposing the Contractor to further damages is overwhelming. Over the past couple of years, the Contractor had to assume the burden and consequences disruptions all of which scored considerable damages. The accrued damages, have never been recuperated, gradually derailing the Contractor's financial standing to even attempt to execute the works. Following each incident of disruption, ¥ The Contractor must have to endure the consequences of reorganization, ¥ The Contractor must have to remobilize both human and material resources disorganized, . ‘The Contractor had to bear the additional cost of each incident of disruption/ disorder attracts. Y Fach attempt that has been made to resume the progress of the works following costly disruptions has never been reciprocated with measures such as establishment of secure environment and payment of the additional costs incurred. Thus far, the Contractor has been struggling not to give in despite undergoing numerous killings, harassments, physical assaults, robberies, lack of improvement in the security situation, etc. Even though, we would have wished to resume the works, however, you must not overlook the fact that: ‘There are still significant number of unsettled complaints in connection with compensation payments that would add fuel to the insecure environment, Transporters would not wish to serve delivery of fuel unless special security arrangements are made and at significantly higher cost, The PM addressed our financial standing is so crippled we would not be able to pay advance money for delivery of fuel that is not less than 3.5 million ETB per each order. We cannot go on to hiring workmen ands commence | > reorganization before secure environment is established and unfettered movement of trucks and. machineries imand out of the project site isensured, | O/,° \a\ Lessors continuous declination |to. lease machines can only be abated through establishmentlof secure'envirohment Page 7 of 11The PM concluded on the fact that significant number of past incidents the Contractor have been through have poured their toll on the Contractor and the accrued consequences have had translated to flattening out the Contractor's ability to execute the works and no more attempt is likely forthcoming to resume the works this time unless the Employer's considerate and helping measures are taken for certain requests, we list out hereunder. > The establishment of secure environment for the wellbeing, safety and security of the Contractor's workmen, v Unhindered mobilization and demobilization of resources, v Resolution of outstanding right of way issues and containment of individual's forceful stoppage of the works. Vv Advance loans are offered for the procurement of material such as fuel, Cement, Reinforcement and explosive that may be paid out to suppliers directly. v Partial of recovery of the costs the Contractor incurred including idle costs of resources, time related overhead costs and payment for the continued provision and maintenance of the Employer's Representative facilities > Most significantly, individuals who killed contractors’ staff, lotted contractors property, attacked contractor camp including PM and disrupted work by force on the roadway must be prosecuted and his property must be returned. Finally the Pm addressed the Contractors financial incapability to supply construction goods without an immediate support from the employer due security problem cessation and remobilization of resources on different occasion The Assistance Resident Engineer briefly discussed the Joint Condition Survey Required to Resume Project Activities site visit and has conducted meetings with the local administrations of Dabat Woreda has been told by the local administration that the security is improved and some of the police forces are established in three (3) kebeles that is Ayrefeda, Arade and Aditewle by each group of 10 members totally prepared 30 police forces, The Assistance Resident Engineer noted no improvement by Dabat woreda administration security situation only promising to the resumption of site activities. Because of the above paragraph states that the Woreda has assigned 30 local polices (Melisha). Y Contractors request fox justice on those who killed his staff, lotted cghirgcto#s property, attacked contractor camp including PM.and disrupted work by force on the roadwe¥-yet Hot prosecuted ¥ __his property not returheg dx atthe time of site visit Ethiopian Roads Administration i BVP. Oo gi aye] : | ; 3 { - ‘ 5 ‘ ? \ é/ ¢ Page 8 of 11Ethiopian Roads Administration Y Previously failed method of securing environment while the contractor requests a regional force the option of arranging such Milisha didn’t guaranty the security of the area as witnessed from past efforts rather it’s a promising effort. The Assistance Resident Engineer briefly discussed the Joint Condition Survey to Resume Project Activities and will not give assurance for resumption of work on both work fronts following the conducted meetings with the local administrations of both Dabat and Tegede Woreda following. the local administration need 20 days to aware the delay of compensation payment to the local peoples and confirm the possibility of commencement of work in written and the same promise of engaging to secure the work environment and expect further notice from both woredas in written on the possibility of when to resume the work. The Assistance Resident Engineer further stated that, in order to be more sure for creating secure environment the Woreda shall control and exercise rule of law by taking legal action on robberies and armed groups and return the looted properties to the Contractor. In addition to this, as the administration head of Tegedie Woreda stated on the discussion, the Woreda will require 15-20 days to discuss with the property owners whom couldn't get their compensation payment until now. Hence, the Woreda administration will inform the Employer via letter. In connection with the Contractor's request on the above six points, the Employer has given his response as follows; » In order to create safe and secure environment on the project site, the Woreda administration has assigned additional 10 security forces on each kebele as discussed above. To this end, the Woreda administration has assigned security force to take legal action on the man who was killed the Contractor's worker. As we observe during site visit, this force is led by Deputy Officer of Dabat Woreda Peace and Security Office who is a member of Police force and has Inspector rank, Hence, the Woreda is performing his assignment. The Employer will settle the problem related with Contractor's mobilization and demobilization of resources, if the Contractor properly inform the Employer through Employer's Representative. > The Employer will solve the right of way issues either by effecting partially or by making detail discussion with concerned authorities and the public. Any financial support request like material advance and cost claim will be administered..under the pertinent provisions of the contract; henee,/ the: Contractor shall submit his proposal to the Employer's Representative. | Hence, resumption of the project is nena Mhotlet to answer the public request. \ v oe PEAS Page 9 of 11Ethiopian Roads Administration Right of Way (RoW) Issues | The ARE of the project noted that the local people is frequently stopping us while we travel along Contract I due to delayed | compensation payment for RoW. On the other hand, the ARE noted | that the office activities of the RoW clearance activities is being executed by both the Employer and the Engineer to finalize outstanding RoW activities. The Employer noted that RoW compensation payment for Contract I is already paid for some road stretches to the owners and advised the Contractor to work closely with the woreda administration in handling RoW issues as complaints have been heard from the woreda side for the failure to work closely with the local woreda. The Employer pledged to handle any outstanding issues in collaboration with both woredas. >» Tegede woreda has requested for more than 15-20 days to convince land owners to convince them on delay of ROW payment and commencement of the work on the back front and this showed the impossibility of directly commencing the site work following the continuous disruption and road blockage due delay of compensation for ROW payment, » The Contractor was also requested for full settlement of ROW payment to avoid disruption and delay to the progress of the work and avoid further financial losses from idle resources The employer requested for the assurance of commencement of work but the woreda complied the difficulty unless public awareness is created v Employer and Engineer | justice is served to the deceased staf. Security Issues The Contractor has noted the need for serious attention on timely solving any security issues and the need for prompt handling of payment for compensation of RoW clearance activities as the local peoples are very sensitive in this regard. The Contractor also noted that the person who killed his loader operator last time is not yet under custody of the police and as this still frustrates his project workers, the Contractor requested the Employer to communicate with the local woreda so that appropriate The Employer noted to solve the serious security issues withj| communicates local admiration of woreda, Zone and Region and it is to be noted that the Woreda administration is on process to do same as discussed above. Employer Page 10 of 11Ethiopian Roads Administration Financial Assistance Requested by the Contractor ‘The Contractor discussed that most of his equipment and manpower has been idle. But, the Contractor has been paying their salary. Furthermore, the Contractor is happy to resume the project after conducting the above preconditions. However, the Contractor requested to consider some financial assistance in order to pay salary for his workers and use the money for purchasing fuel, cement etc to commence the project. The Employer noted his no objection pursuant to the conditions of | the Contract; but, this will be considered after the Contractor submitted his proposal to the Engineer. In this regard, the Employer has advised the Engineer to check any possibility to generate payment to the Contractor in line with the requirements of the Contract. All Conclusion and Summary of the Discussion Y The employer yet didn't receive from the dabat Woreda written proposal and will forward to both the engineer and contractor as soon when they received. Y The employer will further notify from both Woreda with formal letter to get the prevalence of secure environment and list of returned lotted properties within short period. Y We can't resume site project activity immediately because no improvement the security condition and full fill the requested preconditions raised by all parties Y Participants agreed to wait both woredas letter to finalize their assignment. vY The Employer pledged to settle the ROW issues that the Contractor has raised either by effecting the compensation or convincing the public (property owners). Y Regarding the request made by the Contractor for financial assistance, the Employer agreed on principle, but this can be answered pursuant to the conditions of the contract. All 4 The meeting is adjourned at 6:00 AM and the above forms a true and accurate record of the meeting held on 10 November 2023. Page 11 of 11