Agency to Procure Half Billion Br Steel for Housing


Four domestic steel manufacturing companies are participating in the bidding process




The Addis Ababa City Government Public Procurement & Property Disposal Agency (PPPDA) is set to procure 50,084tn of reinforcement bars. This is estimated to cost the Agency more than half a billion Birr.

The Agency is making the procurement upon the urgent request from the Addis Ababa City Saving Houses Development Enterprise (AASHDE) for the construction of the 40/60 scheme of public housing projects for the current fiscal year. The Enterprise is currently constructing 20,932 middle-class houses at six sites.

In a letter sent to the Agency, the Enterprise expressed that it is in need of 10, 12, 14, 16, 20, and 24 grades of reinforcement bars. The ordered amount in tonnes for each grade size is 12,519, 6,692, 6,994, 9,308, 5,882, and 8,689, respectively.

The steel rebars will be procured from local manufacturers through a limited auction. From the 12 big domestic steel manufacturers, four have submitted the technical and financial documents and availed themselves at the technical opening of the tender on August 04, 2017.

Steely RMI Plc, wholly owned by an Ethiopian, C & E Brothers Plc, a joint venture factory of Ethiopians and foreign nationals, Abyssinia Integrated Steel Plc and Habesha Steel Mills Plc, a foreign owned company, are firms that have passed for technical evaluation.

The Agency is offering the chance of supplying the reinforcement bars only to businesses that manufacture the products locally following a direction from the Ministry of Finance & Economic Cooperation (MoFEC), which is also endorsed by the City’s Finance & Economic Cooperation Bureau.

“This is believed to encourage local manufacturers to grow and increase their market share in the country,” said Abdulkadir Redwan, deputy director of the Agency, at the bid opening.

Chaired by Gezehegn Wodaje, a senior procurement officer at the Agency, a committee of five people set by the Agency is handling the detailed document screening process of suppliers, which is in its preliminary phase.

Continued with technical evaluations, post-evaluation that includes physical visits, and finally financial assessment, in consequence, the Agency plans to announce winners in September 2017.

But again, it depends on the way both sides handle complaints and provide information, according to Gemeda Berisa, coordinator of the Procurement Core Process Group at the Agency.

“To maintain fairness, companies which pass evaluations will also be given a chance to supply 40pc of the total rebars as far as they agreed to deliver the item based on the lowest price offered in the auction,” said Abdulkadir. “If the companies agree, the winner can only supply 60pc of the rebars.”

Established three years ago, the Agency is mandated to procure common user items and strategic inputs and also disposes properties of public offices upon their demand.

Though it has so far procured 144 types of common use items, it is the first time that the Agency is engaged in strategic procurement of reinforcement bars.

The country’s total production of steel including basic and rebar metals and tube lames is 693,467tn annually. It also has the potential to produce 1.6 million tonnes of steel a year.

As of August 5, 2017, the international price of steel reached 500 dollars per tonne, according to the London Metal Exchange, a website that provides information of the metal market in London and European markets.



By WOLDEGIORGIS GHEBREHIWOT
FORTUNE STAFF WRITER

Published on Aug 05,2017 [ Vol 18 ,No 901]


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