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Procurement awards another bulk wheat supply contract

The Public Procurement and Property Disposal Service (PPPDS) awarded GM Corp, a London based company to supply 400,000 metric tons of wheat at the price of 97.73 million (2.73 billion birr), The Reporter has learnt.

By the time of the opening of the bid, GM Corp which has never been involved in supplying wheat to the Ethiopian market has managed to give the least offer for all lots. The bid for the supply of 400,000 metric tons was divided into four 100,000 metric ton lots. In this regard, GM gave the lowest prices of USD 249.34, USD 248.34, USD 246.34 and USD 244.34 per ton for each lot.

“We have already sent them an award notification letter,” Ettesa Deme, acting general director of PPPDS told The Reporter.

The price offer was much less than the prices in comparison to offers made by a second new entrant to the Ethiopian market, Wifag back in January, 2019. Back then, Wifag gave the lowest prices of USD 270, USD 274, USD 278 and USD 284 per ton for each lot for a bid to supply a total of 400,000 metric tons of wheat.

During the bid which 10 companies were involved, a company by the name of ADM International was the second least bidder following GMCorp with USD 299 per ton for one lot.

Similarly, Promising International Trading Co. Dmcc, a company quite familiar to the Ethiopian wheat market, has also submitted an offer. It is to be recalled that a couple of months ago, Promising was barred by the Public Procurement and Property Administration Agency (PPPAA) not to participate in any bid process for the coming one year.

The decision involved a 1.39 billion birr contract to supply 200,000 metric tons of wheat. In connection to this bid, the Service submitted a complaint to the Agency which landed Promising in a blacklist of companies barred from participating in any bid in the country for a time period of one year.

It was back in June, 2018 that Promising won the contract to supply the 200,000 metric tons of wheat. During this bid process, Promising agreed to supply the wheat and later failed to do so. Three months after Promising was asked to supply the wheat, the entity that issued the tender, in dismay, retendered the purchase which Promising won again and is now supplying the wheat with 1.56 billion birr.

As the result of the aforementioned reason Promising is struggling with legal litigation where PPPDS have already sued the company for failing to supply the wheat.

For this the bid which GM is now awarded, Promising gave a much higher price for all four lots, ranging from USD 252.60 to USD 299.20, per lot.

Once awarded to the winning bidder, the wheat is expected to be transported to the country and distributed to more than 5,000 bakeries and 300 flour factories

In a related news, PPPDS gave a final warning to Wifag which few months back was awarded to supply 400,000 metric tons of wheat with USD 108 million (3.04 billion birr), but failed to do so.

It is to be recalled that though Wifag was awarded and signed a contract to supply the wheat it failed to submit a performance guarantee worth of 10 million dollar. This has delayed the whole tender process and force the contracting entity, the Ethiopian Trading Business Corporation to complain to PPPDS.

Upon on this PPPDS wrote to Wifag a letter asking the company to submit the guarantee, according to sources.

“We will decide after looking into some other documents which Wifag just submitted,” said Ettesa.