Rama Construction Plc, a domestic construction firm, has been dropped at the technical evaluation stage, from the bid to construct Dire Dawa Industrial Park, the nation’s third state-owned industrial park in the making.
The project, estimated to cost more than five billion Birr, is to construct an industrial park in the eastern city of Dire Dawa, 515Km from the capital, in six months. About two months ago, the company was one of the three construction firms invited by the Ethiopian Industrial Parks Development Corporation (IPDC) to participate in a closed bid, along with Tekleberhan Ambaye Construction Plc (TACON) and a foreign firm, China Civil Engineering Construction Corporation (CCECC). The prospective winner of the bid will be awarded a turnkey project where it will be in charge of both design and construction of the park.
This approach has been adopted following the debacle at the Bole-Lemi I Industrial Park, where no less than 23 local companies involved in the construction have failed to deliver a fully completed facility, even after five years. The decision to take this approach has been based on the successful progress registered so far at Hawassa Industrial Park, the first turnkey industrial project set to open for service in two months, Arkebe Okubay (PhD), special advisor to the Prime Minister and Board Chairman of IPDC told Fortune, in an earlier interview.
Though lack of competition is highlighted as a major shortcoming of closed bidding process, which involves only short-listed companies, it is a legal mechanism whereby companies with proven track records of delivery and capacity are invited to participate, Worku Gezahegn, a procurement expert at the Public Procurement & Property Disposal Service, said.
Still competing in the bid as the sole local company, TACON has fulfilled the 70pc minimum requirement to pass the technical evaluation for the bid and has received confirmation regarding the result, Tekleberhan Ambaye, president of TAF Corporate, parent company of TACON, told Fortune. He expressed his hope that his company will also pass the next stage of the evaluation, bidders financial offer. The project requires companies that have the means to weather shortage of foreign exchange, to import construction materials using their own hard currency.
For the other local company, which took part in the bid, however, the competition seems to be over. Rama Construction, which was established in 1995 and which has built landmark projects such as the modern office complex inside UNECA, inaugurated last year by Secretary-General Ban Ki Moon, has filed a complaint to IPDC, following its disqualification on grounds of the technical evaluation, according to sources in the company. IPDC, managed by Sisay Batcha, former state minister for Industry, is the lead agency established in 2014 to build industrial parks through government financing.
Rama’s disqualification leaves the contest to TACON and CCECC, the latter awarded the construction of an industrial park in Hawassa, 276Km south of Addis Abeba. Industrial parks in Hawassa and Dire Dawa are part of the government’s ambitious plan to establish five such facilities in designated strategic locations across the country over the next five years. During the coming 10 years, the administration of Prime Minister Hailemariam aims to create two million jobs through the erection of 20 million square metres of factory buildings spread across 100,000ha of land in the country, Arkebe noted. The industrial parks will cost the government at least 30 billion Br.
Rama’s exit comes in a context where there is very little confidence from the government’s side in local companies ability to successfully build industrial parks in a short period of time with acceptable standards. Arkebe recently told Fortune he does not see the possibility for a local company getting involved in the construction of industrial parks, including the one in Dire Dawa.
“Probably, by the end of the second Growth & Transformation Plan (GTP II), we’ll have local companies which will be capable of building industrial parks,” Arkebe told Fortune during his exclusive interview in October 2015.
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