A tripartite Memorandum of Understanding (MOU) for construction of the Adama Industrial Park was signed between the Ethiopian Investment Commission (EIC), Hunan Province Commerce Director, and Chinese provincial companies on March 12, 2015.
The construction area is 412ha of the 1,000ha of land allocated for the park; the Commission is negotiating with European firms for the additional construction. The first phase on 119ha will cost more than 300 million dollars and is expected to begin in two months.
“Financing for the construction will be undertaken by the Government of China. These companies have the option of leasing the sheds they construct to the highest bidder for 45-80 years. After that the government will repossess the sheds,” said Getahun Negash, public relations director at EIC.
Hunan-based construction machine manufacturers, SANY Group Co. Ltd., and TBEA, a south-China-based Industry Group specializing in the construction of power transmission and distribution stations are part of the project.
The park project was originally intended to be awarded through a competitive bid. However, contending companies received letters earlier this week, notifying them of their disqualification based on technical requirements.
Before the ink had dried on that letter, Arkebe Oqubay (PhD), Special Adviser to the Prime Minister, and Fitsum Arega, Commissioner of the EIC were in Hunan Province to sign an agreement with Xu Xiang Ping, director general of Hunan Province’s Commercial Department.
This turn of events elicited various reactions from local bidders who participated in the process.
“We didn’t even know the project was awarded to another party,” claimed an employee in Zamra Construction’s tender division.
“We received a letter from the Industrial Park Development Corporation four or five days back stating that our bid was rejected,” so we were waiting for a response to our letter of complaint,” he said.
Despite their reservations, Tekleberhan Ambaye Construction (TACON), Zamra Construction, and Afro-Tsion were some of the companies that had proposed offers in January, along with the international partners with which they had paired. However, TACON’s owner refused to comment on the latest development in the Adama Industrial Park issue.
Clauses in the bid document require the companies to have recorded an annual turnover of six billion Birr and to have built two industrial parks anywhere in the world, as well as to have a positive track record in Ethiopia.
These requirements are disappointing for Awot Kidane, deputy CEO of Zamra Construction, whose company had joined with Dubai-based steel company, Zamil Steel, to bid for Park.
“The requirements are not inclusive in nature,” he said, “as Ethiopia is developing industry parks for the first time and projects of that size have not been available in Ethiopia to begin with.”
Domestic contractors put in their offers despite Arkebe Oqubay’s admission in an earlier interview with Fortune, that it was unlikely for them to get these contracts.
In July 2015, construction of the Hawassa Industrial Park, was awarded to China Civil Engineering Corporation (CCECC) at a cost of 246 million dollars. Originally intended to be completed in six months time, it is now scheduled for a June 2016 opening.
After setting a goal to complete 10 industrial parks by 2020, the Industrial Park Development Corporation (IPDC) has been struggling from the outset. According to Prime Minister Hailemariam Desalegn’s recent report to the House of People’s Representatives, the government is lagging behind on its progress.
Based on this, government has decided to award turnkey projects from design to construction for contractors that come with their own sources of financing.
The Adama Industrial Park is the next project in the pipeline for the IPDC after Hawassa, whose 11,000sqm and 5,000sqm plots were put up for rental bid on March 13, in the nationwide government newspaper Addis Zemen.
Leave a Reply