Algeria cancels construction contract with Japanese firm over delay

Algerian government on Monday said it cancelled a contract with the Japanese public work consortium COJAAL over delay in the completion of a section in the East-West motorway.

In a statement to the local channel III radio, Minister of Public Works Abdelkader Kadi confirmed the termination of the contract with the Japanese consortium Cojaal, saying the completion of the remaining 84 km of the section of the East-West project will be assigned to other companies, without providing further details.

He said that "the selected companies we will be known within a few days or weeks. We will assign them the achievement of the remaining section in record time and at lower cost than that proposed by Cojaal."

In 2006, Cojaal, a group of Japanese companies, snatched a five- billion U.S. Dollars worth contract to establish 359 km section of the East-West highway, from the eastern province of Bourdj Bou Arreridj to the Tunisian border, within a 40 months term.

However, the Japanese group has not delivered the project yet, demanding additional payments, which the Algerian government rejected.

In June, the Algerian highway authorities (ANA) issued two formal warnings to Cojaal about the growing delays plaguing the project. In response, the Japanese consortium decided to take a legal action against the Algerian government at an international arbitration court.

But Kadi said the contract stipulates that any legal action should be brought to Algerian, rather than an international court.