Sunday, September 24, 2023
BusinessThree shortlisted for cement supply

Three shortlisted for cement supply

Three local companies have made it to the next stage in the bid to supply a billion birr worth of cement for public housing projects, according to the Addis Ababa Public Procurement and Property Disposal Agency.

Out of the six local companies, who were competing for the bid, only National Cement, Dangote and Messebo Cement made it to the financial evaluation stage, the Agency stated this week.

The aforementioned three suppliers were evaluated at preliminary, technical and post evaluation stage. In this respect, all of them comply with requirements listed under the three stages of evaluation such as checking whether the companies have a valid business license and if they fulfill the required annual turnover criteria.

The bid, which was floated by the Agency last month, attracted six local cement factories out of the 11 that first purchased the bidding document.

Local cement producers, including Dangote, Messebo, National Cement, Habesha Cement, Mugher as well as East Cement, submitted bidding documents.

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The tender is to procure OPC and PPC cement products. The purchase will be conducted by the Agency on behalf of the Addis Ababa Housing Construction Project Office with a contractual framework agreement spanning Ethiopian fiscal years 2010 to 2012.

For 2010 alone, the Procurement Agency was preparing to purchase 7.3 million quintals of cement as per the request from the Project Office. This particular tender will also give local companies an exclusive right to supply cement for the coming three years (a framework contract) upon demand from agencies that manage the housing projects.

For the past few weeks, the price of one quintal of cement in Addis Ababa ranges from 212 birr to 215 birr. For the 2010 purchase alone, the city will spend close to 1.7 billion birr, as part of a three-year framework contract (from 2010-2012).

However The Reporter learnt that following the currency devaluation the price of cement has shown an increase. Factories are now selling one quintal of cement for 219 birr.

The latest tender came following a back-and-forth between local producers and the Agency. It is to be recalled that the Agency floated the same tender a couple of months ago but in a different format.

It was originally an international competitive bid open for both local and international suppliers.

However, this arrangement was challenged by local producers, inviting intervention by the Addis Ababa Finance and Economic Development Bureau.

The local producers argued that the tender should exclusively be reserved for local producers. Their argument was based on the fact that there was ample local capacity for  supplying the required amount.

Following this, the Agency, upon a direction from the finance bureau, amended the international competitive bid, giving local producers an exclusive right to compete in the bid.

Currently, the number of local cement factories stands at 20, and annual cement production of the country has reached 15 million tons per year.

Following preliminary and technical evaluations, the Agency will look into financial proposals by bidders.

In case there would be any complaints, the Agency gave bidders two working days to submit them.

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