Due to riots and alleged security concernsIHI suspends work on Cement Factory [Archives:2005/873/Front Page]

September 1 2005

Hassan Al-Zaidi
Amran, Yemen, Aug. 29)Negotiations are ongoing between the Japanese Company IHI, owner of the Amran Cement Factory and the factory's administration represented by Numan Dowaid, the general manger. IHI suspended its development project on July 23 over security concerns after riots broke out following the lifting of government subsidies on oil products.

The two parties held a meeting last Monday attended by the Japanese Ambassador to Yemen, who viewed the security situation in the area and oversaw discussions of an industrial dispute.

A representative of the company's striking workers said he failed to persuade workers to resume work after their offices were attacked and set ablaze after the riots.

At the meeting, Numan Duwaid, General Manager of the factory asserted the claims of workers and the danger of employment in a volatile climate. He said: “What happened is an emergency not only in Amran; the riots took place in most of the Yemeni cities but did last for more than one and half days. We provided security for the company and intensified the size of military troops for protecting the company, its workers and equipment.”

“If they have any comment on the security measures, we are ready to reconsider them and meet their demands,” he added. “Their letters never included suggestions or complaints on the lack of security measures, and we were shocked to find out the company raising claims for huge sums of money in return for resuming work; a demand that is impossible to be met as we have contracts and agreements with the company that we cannot breach.

According to Duwaid, the company contravened the law and went to the Cabinet claiming compensations for what they allegedly lost.

Taha Hajer, Governor of Amran told the Japanese Ambassador that security issues would be dealt with by local security forces.

He also claimed rather unconvincingly that: “Being the top official in the governorate, I never learned of any clashes or confrontations with the Japanese workers during any events or riots witnessed in the country.”

The Japanese Ambassador visited the cement factory site and toured new security installations, encouraging workers to feel secure and continue working.

Nuamn Duwaid told the Yemen Times the company should be held accountable for the days of suspension and the factory's administration is ready to accept negotiation for any legal work within limits of the contract.

“We still have rights to claim from the company, and in case the suspension from work continues for a longer period of time, we will resort to the judiciary,” the Cement Factory Manager pointed out, warning any parties of intervening to tackle the situation. He said negotiations and treatments should proceed within the limits of the contract.

These warnings come after rumors about negotiations between the company and the Cabinet under which the latter grants the former certain amounts of money in exchange for resuming work after the company set its demands for compensations totaling up to 30 million dollars.

Reliable resources confirmed to the Yemen Times that the company asks for compensations amounting up to 13 million dollars for the days of suspension over security concerns. Abdu Saleh Thabet station manager of the expansion project said this is a merely extortion and prolonging of the process and ascertained the latest negotiations with the company yielded positive results in favor of Amran Cement Factory such as paying half the cost of a 10-megawat electricity transformer.

“The administration of the factory will not surrender to any pressure from any party and the factory will insist on claiming its rights particularly as it contributes considerable revenues to the State's budget,” said Duwaid. “We never accept any justifications for violating the international standards and specifications in the selection of locations according to the contracts signed in circumstances that appeared to serve the factory in particular and the public interest in general.

The Cement Factory signed an expansion contract on June 24 with the Japanese Company IHI after the Cabinet approved the tender since the local demand for cement rose by 5.6% every year. The cost of the project was estimated at $141 million to be taken from revenues of the factory, and the production of the expanded project will start by the advent of the coming year.

The progress in the implementation of metal and mechanical works carried out by the Malaysian Company JEL reached 95%. The achievement rate in the field of electricity implemented by Toshiba was estimated at 50%. .

The production capacity of the factory came at 6.3 million tons a year between 1998 and 2002; however this quantity could not meet the rising demand in the local market which helped push the price to 1400 rials per sack. An additional one million tons will be produced each year to meet the growing demand of a booming building sector.