Donors are waiting to hear the fate of vehicles impounded in March and April, many of which were due to be donated to the government at the end of their respective projects.
"The proposed new funding amounted to between $5 million and $10 million. But that is now under threat," said one Western diplomat, who declined to be identified.
"Among the donors, the feeling is increasing that this kind of breach of contract is not acceptable any more."
A total of 120 U.N. and non-governmental organisation vehicles have been confiscated in recent months, diplomats say.
A senior Eritrean official said vehicles were impounded in an effort to improve efficiency while fuel remains scarce. Fuel has been rationed in Eritrea since December.
"We are trying to introduce a pooling system," said Information Minister Ali Abdu Ahmed. "We have meagre resources and we are trying to use them as efficiently as possible."
Eritrea is peppered with landmines, some of them relics from World War Two, others left over from a 30-year independence struggle or the 1998-2000 border war with Ethiopia.
"The government will really have to compensate for vehicles confiscated and broken contracts," said another Western diplomat. "Since we are donors, we can always deduct from other programmes."
- Reuters - Thomson Reuters Foundation
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