A building constructed for the National Archive and Library Agency (NALA) is still standing idle four months after its construction ended.

Sources disclosed that the reason the Agency has not moved in and opened up for work is because the construction company that built the new building, Grace Construction, was not willing to hand over the keys to the edifice.

A senior management staff from Grace Construction told Fortune that company refused to hand over the keys because they request additional payment from the original contract amount of 21.6 million Br.

To many industry observers, the conflict stems directly from the government’s new policy regarding local construction.

An expert from the field told Fortune that although the Ministry of Infrastructure used to be the deciding party in regulating price increases and price variations on construction projects, this responsibility has now been deferred to the developer and the consultant, with the contractor staying out of the proceedings.

On July 8, 2006, when the Ministry of Infrastructure was restructured into the Ministry of Works and Urban Development, it stopped its regulation works that formerly monitored price variation and the Archives building project finds itself in the middle of this new procedure.

After beginning construction work four years ago, design changes were made to the building, which resulted in extra building expenses, according to the contractor and the project consultant.

Since the Agency was not willing to make payments based on these additional expenses, although the changes were made, the construction company refused the hand over.

Semere Mengistu, Director of the Contract Administration Department at the state owned Construction Design Enterprise S.C. (CDESCo) told Fortune that due to the design changes as well as the increase in building material prices, the cost of the edifice increased by about 33pc from the agreed upon amount.

“Although we had informed the Agency of the price variation two years ago, they were unwilling to make the payments,” he said.

However, Grace Construction disputes the consultant’s figures and claims it is actually 46pc, which amounts to over five million Birr.

Nevertheless, sources close to the issue, said that  when CDESCo was calculating price adjustments, the Agency provided incorrect figures in its request to the government. CDESCo and Grace asked the Agency to change its request, but it refused stating that it could not repeatedly ask the government for a higher budget.

The over 60-year-old Agency has been located in an old building on the Ministry of Culture and Tourism compound on Sudan Street, near the Ministry of Health; the new building lies on a 1,000sqm of land in this same compound.

The Agency had wanted to relocate its 192 employees, as well as books and written records that have been collected and stored over the past 60 years, to its new offices.

According to the contract between the Agency and Grace Construction, the construction was to take two years but it nonetheless took four. But since the reasons for the delay were based on design changes, neither party placed any complaints on the missed deadline.

Semere said that the construction company finished the building four months ago and had started temporary delivery of the building, but because of the construction price concerns raised recently, it had to postpone the handover. All works were concluded, on September 15.

“Since I was out of the capital, I did not personally witness the conclusion,” Semere said.

Atsede Zeleke, the Agency’s Finance and Administration head told Fortune that the reason that they had not moved into the new building was not because of the dispute, but simply because final touches had to be addressed.

“We will discuss the payment issue and execute it, once we are sure that all works have been completed and the keys are handed over,” she said, adding that she believed this would be done this past week, but so far it has not.

Grace Construction, which was established by Gebremichael Markos 13 years ago, is one of the top 25 construction companies in the country. Other construction stakeholders are afraid that the Archive building complication will quickly spread throughout the industry with the Ministry’s new policy.

“This type of working system will cause disagreement in the future,” a professional from the field stated, adding that this will result in many more court cases due to the situation. Grace Construction has decided that if it is not paid its owed amount, then it will be taking the dispute to court to have it resolved.