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Six local cement producers vie for bln birr supply

Six local cement producers vie for bln birr supply

Six local companies are bidding for a multimillion birr cement supply contract for government housing projects in Addis Ababa, it was learnt.

This particular tender will also give local companies an exclusive right to supply cement for the coming three years (a framework contract) upon the demand from the Agencies which manage the housing projects.

The bid, which was floated by the Addis Ababa City Public Procurement & Property Disposal Agency, attracted six local cement factories out of the 11 which first purchased the bidding document.

The bid opening was on October 4, 2017.

Local cement producers including Dangote, Messebo, National Cement, Habesha Cement, Mugher as well as East Cement managed to submit their bidding document.

The next step will be the Agency doing a preliminary and technical evaluation. The preliminary evaluation among other things includes checking whether the companies have a valid business license and if they fulfill the required annual turnover criteria.

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 the framework agreement contract spanning the Ethiopian fiscal years 2010 to 2012.

For 2010 EC alone, the procurement agency was preparing to purchase eight million quintals of cement as per the request from the Project Office.

Currently, 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).

“We are now looking into documents submitted by the bidding companies,” Abdukadir Redwan, deputy general manager of the Agency told The Reporter.

The latest amended tender came after a back and forth between local producers and the Agency. To recall, a couple of months ago, the Agency floated the same tender but in different format.

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

However, this was challenged by local producers which later invited the intervention of the City’s Finance and Economic Development Bureau.

The local producers argued that the tender should exclusively be reserved for local producers; and that international suppliers should not be invited. Their argument was based on the fact that there is local capacity for the required cement supply.

Following this, the Agency, upon a direction from the Finance Bureau, amended the international competitive bid to a National Competitive bid which gave 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/year.

“We hope that the evaluation process will be completed in a short period of time,” said Abdukadir.

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