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Trio bidding to secure bln birr rebar contract

Trio bidding to secure bln birr rebar contract

Three local notable rebar producers are bidding to snatch a billion birr tender for the supply of rebars for the Addis Ababa housing projects out of the invited nine local producers.

This latest tender came after the procuring body, the Addis Ababa Public Procurement and Property Disposal Agency, decided to rebid the billion birr rebar purchase after months of back and forth with the company that was awarded the supply contract pursuant to the outcome of the previous bid process.

The bid, which is intended to purchase 35,513 tons of rebar from local market, attracted three rebar producers such as Steely RMI, C & E Brothers, and Abyssinia Integrated Steel PLC.

The bid was opened on November 23, 2017.

According to industry sources, this round of the bid will probably see a significant price increment. The price of one kilogram rebar might go up as high as 30 birr.

This round of bid came a long way as none of the suppliers have managed to win over the bid so far.

It is to be recalled that Steely was on the verge of winning the supply of 35,513 tons of rebar, which is composed of different sizes, after listing a winning price of a total price of one billion birr.

This latest tender is part of a plan to purchase 50,084 tons of reinforcement bars of different sizes. In this respect, Steely gave a total price of 1.23 billion birr for the total supply.

In a financial result notification letter issued by the Agency, the offers made by Steely to 10mm, 12mm, 14mm, and 16mm was accepted.

The bid, however, got interrupted after unforeseen circumstances such as the devaluation of the birr and the subsequent continuous rise in the international price of rebar affected the market.

In the middle of the bid award process, the currency devaluation at a magnitude of 15 percent came and the price of reinforcement bars was in a continuous increase both internationally and locally.

This and other incidents made things difficult for Steely. Finally, the case went to the Board of the Agency, chaired by Abate Sitotaw, deputy mayor of Addis Ababa.

The Board, however, decide that the tender should be repeated saying that adjusting prices following the devaluation is against procurement directives. 

Following this, the Agency floated a restricted bid a couple of weeks ago inviting nine local rebar producers, to participate in the bid.

Aside from the price listed by Steely for 10mm, 12mm, 14mm, and 16mm that was accepted by the Agency, the offers made for 20mm, and 24mm bars were not accepted.

According to the Agency’s officials, the price offered for the two sizes had a marked difference with the market price. For this particular bid, four local companies – Guna Trading House (representing Habesha Steel Mills) Steely, Abyssinia Integrated Steel and C&E Brothers – entered the competition.

This particular bid is now under evaluation.

Over the past one month, the price of steel bar has risen on the global market. According to the London Metal Exchange, on July 31, 2017, the price of steel bar was USD 460 per tons. It has now reaches around USD 523. London Metal Exchange is a global platform for metal exchange and trading.