Thursday, February 2, 2023
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BusinessAbyssinia inks multimillion birr deal

Abyssinia inks multimillion birr deal

After almostsix months of delay, the Addis Ababa Public Procurement and Property Disposal Agency finally signed a contract agreement worth 172 million birr with a local steel producer, Abyssinia Integrated Steel.

It is to be recalled that the latest separate rebidding, for 20mm and 24mm rebar, four local companies along with Abyssinia showed an interest including Guna Trading House (representing Habesha Steel Mills PLC), Steely, and C&E Brothers.

From this, only Abyssinia and Steely made it to the financial stages and later won the supply. In this respect, Abyssinia gave a winning total price of 171.1 million birr and Steely listed 265.0 million birr for the 5,882, and 8,689 tons of 20mm and 24mm rebar, respectively.

By the time, Abyssinia accepted the award while Steely came up with preconditions before signing the contract.

In this respect, Abyssinia signed a contract with the Agency to supply the rebar, The Reporter has learnt.In this regard, Steely demanded the Agency to facilitate foreign currency in order to import raw materials used to make rebar, mainly billets.

In addition to this, they als0 asked the Agency to cover future costs incurred for test results of its rebar, according to Abdukadir Redwan, deputy general manager of the Agency.These two preconditions are unacceptable, he said.

Given these demands from Steely, the Agency will decide on the fate of the bid as of this week, The Reporter has learnt.

On the other hand, Abyssinia is expected to deliver the products in the coming few months.

This bid was a part of a large purchase by the Agency which was floated for only local producers almost six months ago. The Agency floated a tender to purchase 50,084 tons of reinforcement bars from local producers. During the bidding process, which was floated twice, some of the local producers were almost on the verge of winning the supply yet still failed to agree on terms.

The bid was for the supply of 10mm, 12mm, 14mm, 16mm, 20mm, and 24mm reinforcement bars. The amount in tones for each grade size is 12,519, 6,692, 6,994, 9,308, 5,882, and 8,689, respectively.

During that time, it was only Steely which managed to reach into the final stages. During the initial stage of the bid in October, 2017, the company listed 1.23 billion birr for the overall supply.

Following this, the Agency accepted the respective offers by Steely, except for the one given for 20mm, and 24mm reinforcement bars, attributing the rejection to expensive prices quoted in comparison to the market prices instead.

Later, the Agency decided to rebid the tender for the two sizes. By that time, the company gave 24,773.1 birr and 24, 773.1 birr for one ton of 20mm, and 24mm bars, respectively. However, the offers for the remaining diameters were also interrupted by Birr’s currency devaluation which complicated the process even further.

So far, except the contract awarded to Abyssinia, none of the bid from the aforementioned suppliers were able to proceed to a final stage.

Established in 2011, Abyssinia is a private joint venture which produces and supplies reinforcement bars in the country.

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