Rebar bid worries housing project
The Addisi Ababa City Administration is seeking amicable solutions to the billion birr steel purchase bid intended for the Addis Ababa housing project since it has been in limbo for the past six months.
The purchase, which is exclusive to the local steel bar producers, has been going on for the past six months though the Addis Ababa Public Procurement and Property Disposal Agency. However, the agency failed to finalize the purchase process and deliver the rebar to the project.
The purchase, which is supposed to be finalized in a short period of time, is frustrating the buyer, now.
“Unofficially, those behind the public housing project are calling for the expedited delivery of the rebar,” an official from the Agency told The Reporter.
During the consecutive bidding and rebidding process of the bars it was only a handful of them, among a dozen of local manufacturers, who were able to pass the technical evolution stages.
Most of those who have failed to pass the technical stages had difficulty to come up with test results for their products from the Ethiopian Conformity Assessment Enterprise (ECAE).
On the other hand, local producers argue that the Agency unlike other public procuring entities has made adjustments to the specifications of the rebars in the tender document making it difficult to meet the supply standards.
They also argued that the change in specification is the reason behind their failure to bring test results from ECAE.
“What we know is that these producers are supposed to have the test results every three months in case of any supply of rebar, said Abdukadir Redwan, deputy general manager of the Agency; but in most case, bidders fail to produce their test results.
As far as the specification of the rebar is concerned, officials of the Agency issues the bids based on similar specification which they have been employing for the past years.
Contrary to this, local producers are arguing that there was an adjustment in the old specifications which led the producer to come up with new terms.
They allege that since the specifications are new, the producers need to import raw materials which are not currently available in the country. Yet, they failed to import the raw materials as the result of shortage of foreign currency.
What we were told from Addis Ababa Hosing Agency is that there have been no change or adjustment when it comes to specification, an expert from the Agency told The Reporter.
The back and forth in the supply of rebars to the housing project is now being done in consultations with the local suppliers, the procuring agencies and the Metal Development Institute, The Reporter has learnt.
Following this, a meeting is expected to be held among the aforementioned parties.
It is to be recalled that, the Addis Ababa Public Procurement and Property Disposal Agency has floated a tender to purchase 50,084 tons of reinforcement bars from local producers.
In this respect, 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.
It 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.
Yet, it was only a single company, called Steely RMI, 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 the one given for 20mm, and 24mm reinforcement bars, attributing the rejection to expensive prices quoted in comparison to market prices instead. the Agency decide 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.
Unfortunately, the offers for the remaining diameters were also interrupted by birr currency devaluation which complicated the process further.
In the latest separate rebidding, for 20mm and 24m, four local companies – Guna Trading House (representing Habeshs Steel Mills PLC), Steely, Abyssinia Integrated Steel and C&E Brothers entered into the competition.
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.
However, Abyssinia accepted the award while Steely came up with preconditions after securing the bid.
“We don’t have a problem with most of their preconditions such as advance payments, initial delivery within 40 days and etc.,” Abdukadir said. However, they ask for possible adjustments of prices in case of currency exchange fluctuations or adjustments of taxes.
This is something we can’t accept, he said. We told them to lift this particular precondition unless we will cancel the bid.
As far as the rest, all of the local producers who competed to supply the 10mm and 14mm failed to pass the technical stage for the same reason of submitting test results.
During the financial opening which was held on December 21, 2017, Steely, the only company in the stage, gave a total price of 497.7 million birr for the remaining supply of 12mm and 16mm of 6,692 tons and 6,994 tons rebar.
Following the financial opening, the company also set out similar preconditions.
Board of the Agency and city officials are now considering consulting Ministry of Finance and Economic Cooperation regarding possible ways of solving the supply problem, said official from the Agency.
If things are not going to change from the local producers, the city officials may ask the ministry to consider the privilege it gave for local producers when it comes to the rebar supply, according to the agency.
It is to be recalled that the Ministry since February, 2016, issued a circular which directed all government procurement agencies to exclusively buy rebars only from local producers.