Enterprise Snatches New Year Exhibition, Case at Court

Addis Abeba Exhibition Center & Development Enterprise has reversed its award to Century Promotions Plc for the Ethiopian New Year exhibition and transferred it to Dum Promotions Plc. This has come after a series of exchanges between the contenders and Addis Abeba’s authorities at different levels.

Dum Promotions had offered five million Birr more in the bid than Century Promotions had offered.

Despite the higher offer, the Enterprise had awarded Century, disqualifying the two top bidders as not technically fit to participate.

The squabble will not soon be over, as Century Promotions, objecting to the latest decision of the Enterprise to award Dum Promotions, has decided to take the case to court.

Zewge Jemaneh, general manger of the case is now in the hands of high court. Century Promotions has confirmed.

“We are aware of the fact that Century filed a court case,” a representative from Dum Promotions told Fortune. “But we will proceed with the award confidently.”

The controversy kicked off when Dum submitted its complaint upon the Enterprise’s announcement that Century had won the bid.

Following this on April 1, the Enterprise has signed the contract agreement with Century, rejecting Dum’s complaint on the same day.

“Now that Century has a contract duly signed by the Enterprise, it can legitimately present its case to court on the basis of contract breach by the Enterprise,” Tafesse Yirga, a practicing lawyer commented. “This is not about the bid but the contract, which is cancelled unilaterally.”

Following the announcement of the award by Century Promotions, close to 150 companies and individuals have registered paying half the total price for rental of their exhibition space.

Century’s price index quotes 51,000 Br for a nine square metre stand inside the main halls, and a 38,000 Br to 46,000 Br price range for the same sized stand outside the halls, depending on the location of the spots. The amount collected so far could be close to three million Birr.

The fall-out in this bid process started in March. That was when two bidders, Dum and Shadem  both media & promotion companies cried out for intervention from the Addis Abeba Finance & Economic Development Bureau mandated to oversee the Enterprise.

The companies offered to pay 20.1 million Br and 17.8 million Br, respectively.

Dum is a new player in the field though it was licensed a decade ago.

Century Promotions, on the other hand, is a veteran which has been operating in the industry for two decades. The company was founded in 1991 and has organised more than 20 international exhibitions in the country under the theme of “Addis Trade for Development” during major holidays. In this year alone it has organised four major exhibitions both in Addis Abeba and elsewhere.

The case at hand will further complicate and delay the process and therefore the preparation period. It will also soar the competition to host holiday exhibitions is an area that sees constant growth in investment.

Offers made by all five contenders for the New Year’s exhibition are higher than winning offers for this year’s Christmas and Easter holiday bazaars.

Previously, in 2014/15, Ayu Alemu Event Organizer won the two events with 12.6 million Br and 9.6 million Br, respectively.

In the challenged bid process not only was price an issue but so was procedure.

Both Dum Promotions and Shadem reported that they were disqualified from the bid process after both technical and financial steps were completed and opened.

“There is no exception to revise the technical review after the financial offer is opened,” an expert commented.

The city’s Finance Bureau accepted the complaint and a letter to that effect signed by Girma Gidi, deputy head, was sent to the Enterprise. “The decision highly compromises the benefit of the city, and therefore has to be revised,” read the letter dated April 22, 2016.

A middle level manager in the Bureau mentioned to Fortune that the chances the case might end up in the office of the Federal Ethics & Anti-corruption Commission were high.

The executive order from the Bureau resulted in temporary suspension of the initial award.

“We are doing our job, proceeding with registration,” said Zewge, during the same week of the suspension.

Since the cancellation was announced after the contract had been signed, the Enterprise should have abided by the terms and conditions of that agreement, explained Tafesse. If Century Promotions finds any loophole in the contract document it can challenge the decision.

The latest revision by the Enterprise came this week, by way of its letter to Dum Promotions signed by Tamrat Admassu, the CEO.

Justification for the revision as stated in the letter refers to the Finance Bureau’s recommendation to ensure the highest financial benefit for the city. The letter issued on May 23, 2016, advised Dum Promotions to sign the contract after four days and to start the preparations as soon as possible.

“The decision by the city has to be respected,” Tamrat said. “And anyway, the upcoming expo must go on.”

However, Dum Promotions indicated that the three-month lag would definitely affect the company’s feasibility.

“We have to re-initiate negotiations particularly with participants from UAE and the Gulf states,” Eyob Assefa, the company’s Communication Head disclosed, contemplating a relatively higher price for rental of a stand, than that announced by Century Promotions.

The 23,000sqm exhibition compound located in the heart of the capital, Mesqel Square, accommodates more than 350 exhibitors. During the last Easter Bazaar, participants paid 29,000 Br for a nine square metre stand.

 

 


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