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Ethiopia: High Court Suspends U.S.$34.3 Million Bid Outcome


AllAfrica

November 9, 2015

By  Dawit Endeshaw

Yet another bidding process in dispute; this time over PPPDS’ handling of tender process.

A 34.3 million dollar technology contract between the Public Procurement & Property Disposal Service (PPPDS) on behalf of the Information Network Security Agency (INSA) and a US company, has been suspended by a Federal High Court order following a complaint by a Chinese company that was bidding for the contract.PPPDS was handling the tender process for INSA, which wanted to procure Digital Video Broadcasting Second Generation Terrestrial (DVB-T2) Network Rollout solutions. There was a minimum precondition for bidders that the purchase should be on a vendor financing basis, where competent bidders would bring partners who would facilitate the credit service with a minimum repayment schedule of 10 years.

The overall purchase was divided in two lots; for the procurement of system, subsystem, equipment & goods and the remaining and, for the supply of signal measurement & monitoring systems. Nine bidders came forward in June 2015, four of which made it through the technical evaluation. Three of them offered for Lot One, consisting of installing the infrastructure that would serve the implementation of the system, and one bid for Lot Two to supply the measurement & monitoring systems. The sole bidder for Lot Two, Giga Communication Ltd. from the UK, got its contract worth 214.7 million Br uncontested. However, the award of the contract for Lot One to GatesAir, an American company known for its work on over-the-air analog and digital radio/TV stations and networks worldwide, which was said to have offered the lowest price of 34.3 million dollars, was not pleasing to Star Software Technology, a Chinese company, which took its case to court.

In its civil suit filed at the Federal High Court’s First Civil Bench, Star Software Technology claimed that it had offered the lowest price and proposed competitive terms of repayment. The Bench then suspended the contract from November 5, 2015, coinciding with the scheduled contract signing, until December 1, 2015.

The claim by the Chinese company mainly revolved around the loan and its respective offer, said Yigezu Daba, director general of PPPDS, while declining to discuss the issue further, saying it is now up to the court.

Lot Two bidder, Giga, is a subsidiary of Ultra Electronics Group, which boasts of “a portfolio of specialist capabilities, generating highly-differentiated solutions and products in the defence and aerospace, security and cyber, transport and energy markets, by applying electronic and software technologies in demanding and critical environments to meet customer needs.” Its clientele includes such media institutions as BBC, CNN and Al Jazeera, according to its website.

The procurement was meant to transform the current analog based television broadcasting systems into digital systems. The purchase was intended to be made while attached with credit schemes where each bidders was obliged to come up with a third party that would facilitate a loan for the purchase.

Established under a mandate of strategic and framework purchase, the service in the past four months has conducted three billion Br worth of purchases. From this, one billion Br was dedicated to the purchase of wheat, 873 million Br for construction and 935.6 million Br for the purchase of iron bars.

Ethiopia: WFP Buys Record Quantity of Maize From Ethiopian Cooperative Unions


AllAfrica.com

February 26th, 2013

Addis Ababa — The United Nations World Food Programme (WFP) has announced that local farmers cooperatives in Ethiopia have begun delivering the largest amount of maize they have ever sold to WFP, enough to support more than 1.8 million people for a month.

Before the planting season last year, WFP signed forward contracts with 16 cooperative unions in Ethiopia for purchase of more than 28,000 metric tons of maize. The first deliveries on those contracts began arriving at WFP warehouses last week. The maize will be used for WFP relief distributions in Ethiopia.

“Our goal here is to support Ethiopia feeding itself,” said WFP Country Director Abdou Dieng. “Buying food for our Ethiopia operation right here in Ethiopia makes sense in cost-effectiveness, and in providing a boost for the local economy by helping small farmers to get closer to markets.”

This is being done under WFP’s Purchase for Progress initiative (P4P), which is financed by the Bill and Melinda Gates Foundation and implemented in collaboration with the government of Ethiopia through the Agricultural Transformation Agency (ATA).

The forward delivery contracts signed with the cooperatives are one approach the P4P pilot initiative is testing to promote small farmers’ access to markets. To support the cooperatives in fulfilling their contracts, WFP provides technical assistance to farmers associations for storage and post-harvest handling and logistical support. Through agreements with local banks, several agricultural cooperatives were able to use their WFP contracts as collateral for loans to buy new equipment and aggregate more maize from their members.

In Ethiopia, WFP buys food grown locally in two ways: It buys from small-scale farmers and farmer cooperatives through P4P, and also buys large quantities of locally grown commodities through its regular procurement tender process.

In 2012, WFP purchased more than 112,000 metric tons of food in Ethiopia, more than any other country on the continent.

About 90 percent of this food has been used directly for WFP operations within Ethiopia. For example, more than 37 schools taking part in the WFP school meal programme in Ethiopia receive food harvested nearby.

Last year WFP assisted more than six million people throughout Ethiopia, including refugees.

 

Manhattan Corp awarded R160m Ethiopia EPCM contract


Mining Weekly

By Nathalie Greve

January 14th, 2013

JOHANNESBURG (miningweekly.com) – Local mining services provider Manhattan Corporation would undertake a R160-million contract to build a 25 000 t/m carbon-in-leach (CIL) gold plant, in Mekelle, in Ethiopia, for industrial group Ezana Mining and Development.

The contract would see Manhattan supplying the gold plant on a turnkey basis and included design, engineering, procurement, shipment, construction, installation, implementation, after-sales skills development and support, with an optional offtake contract.

Work on the operation began earlier this month and the plant was expected to be operational by the end of the year.

The company added that the plant process would incorporate crushing, milling, leaching, carbon absorption, washing, stripping, elution, electrowinning and smelting.

“Manhattan is committed to incorporating Ethiopian suppliers, manufacturers and content to maximise job creation and economic development in that country,” Manhattan FD Theo Pouroullis said in a statement.

The plant would incorporate several innovative technologies, including optimised leaching and air-sparging, as well as adaptable feed to the comminution circuit to allow for improved plant availability, up-time and increased final gold production.

The technology provided incorporated CIL and carbon-in-pulp, which consisted of a series of tanks enabling adequate residence time.
The first two tanks would be used for leaching while the remaining six would be used for leaching and absorption.

Manhattan also recently concluded a plant expansion feasibility study for a Glencore subsidiary, in Australia, which involved an assessment of the increase in processing capacity for the operation and a reduction in the overall operating costs.

Additional recent projects included the development of a three-dimensional underground resource development and mine plan for the Manhattan-owned Gravelotte gold mine, in South Africa, which increased the resource from previous inferred resource estimates to a one-million-ounce probable gold reserve.

Edited by: Chanel de Bruyn

World Bank Advised Ethiopia to Audit Large Telecom Agreements


Business Ethiopia

Reporter

January 11, 2013

The World Bank (WB) in its report on the status of corruption in Ethiopia advised the government to audit Ethio Telecom’s large agreements. 

According to the report launched this morning at the Hilton Addis, focusing on the level of corruption in the country in different sector sectors, the government needs to apply standards to Ethio Telecom that are in line with Ethiopia’s Public Procurement Proclamation.

The report, “Diagnosing Corruption in Ethiopia”, in its subtopic that assessed the level of corruption in the telecom sector also stated that absence of uniform procurement standards is one of the major causes of corruption, among others.

The report highlighted that the vendor financing contract entered into by the then ETC (Ethiopian Telecommunications Corporation now named Ethio Telecom) in 2006 appears to be highly unusual. “…This brief study should not be seen as an investigation or interpreted as alleging in itself that corruption has necessarily occurred. However, the circumstances as perceived both by stakeholders and by independent observers do raise serious questions about the control of risks in this sector.”

The stakeholders of the then 1.5 billion US dollars vendor financing argue that ETC’s financial requirements were not provided in detail to those suppliers (other than possibly the winning supplier –China’s ZTE) that had been approached to consider providing such financing. The report also stated that there is no evidence of a formal tender procedure for the finance package.

“The supplier selected by the ETC to supply the finance package that suited the ETC’s purposes. The equipment supply element of the vendor financing contract was not put out to competitive tender.”
The report stated that generally the contract was not in accordance with the ETC’s procurement procedure and no competitive tender for the contract and subcontracts.

“Difficulty in measuring technical compliance: By appointing one supplier without competitive tender, the ETC has no opportunity to assess the degree of technical compliance of the supplier’s equipment. The contract was also inappropriate and went through unclear procedures for ensuring technical quality and competitive pricing,” according to the report.

In addition, the report further mentioned that Ethio Telecom is vulnerable to corruption because it is under government monopoly.

Health, education, water, justice, construction, land and mining are also the sectors surveyed by the report sponsored by the World Bank, Canada International Development Agency, UK Aid and the government of the Netherlands.

“Some of the recommendations of the report are under implementation,” said Ali Suleman, Commissioner of the Federal Ethics and Anti-Corruption Commission (FEACC).  While the report also recalled that in January 2008, the FEACC 2008 brought charges against a former ETC CEO and 26 former ETC executives for allegedly “procuring low-quality equipment from companies that were supposed to be rejected on the basis of procurement regulations.”

World Bank country Director, Guang Zhe Chen, on his part stressed that the purpose of the study is conducted to support evidence-based policy formation.

Africa land deals lead to water giveaway


guardian.co.uk

By Mark Tran

June 12, 2012

Africa heads for ‘hydrological suicide’ as land deals hand water resources to foreign firms, threatening environmental disaster.

Millions of people will lose access to traditional sources of water because of “land grabs” in Africa, according to a report on Monday that looks behind the scramble for farmland in Africa.

The report: Squeezing Africa dry: behind every land grab is a water grab, shows how land deals, covering millions of acres of fertile lands, also pose a threat to Africa’s fresh water systems.

“If these land grabs are allowed to continue, Africa is heading for a hydrological suicide,” said Henk Hobbelink, co-ordinator of Grain, a group that backs small farmers.

The report – the latest to raise the alarm over competition for scarce water resources – said all land deals in Africa involve large-scale industrial agriculture operations that will consume massive amounts of water, could rob millions of people of their access to water and risk the depletion of the continent’s most precious water sources.

Grain cites the Nile and Niger river basins as two examples of the “giveaway” of land and water rights. Three of the bigger countries in the Nile basis – Ethiopia, South Sudan and Egypt – have already leased out millions of hectares in the basin. Citing figures from the UN’s Food and Agriculture Organisation (FAO), Grain said these made clear that recent land deals vastly outstrip water availability in Nile basis.

According to Grain, Ethiopia, Sudan, South Sudan and Egypt already have irrigation infrastructures in place for 5.4 million hectares (13 million acres) of land and have now leased out a further 8.6 million hectares of land.

“This would require much more water than what is available now in the entire Nile basin and would amount to no less than hydrological suicide,” said the report.

In the Niger river basin, independent experts believe Mali has the water capacity to irrigate only 250,000 hectares. Yet, said Grain, the Malian government has already signed over 470,000 hectares to foreign companies from Libya, China, the UK, Saudi Arabia and other countries in recent years, virtually all of it in the Niger basin.

Grain said the secrecy around land deals makes it hard to know exactly what is being handed over to foreign companies, but from those contracts leaked or made public, it is clear they tend not to contain any specific mention of water rights, leaving the companies free to build dams and irrigation canals at their discretion…Read more.

Ethiopian Public Procurement Law applicable only to the private sector


Ethiopian Legal Brief

By Abrham Yohannes

February 16th, 2012

In developing countries like Ethiopia, the provision of services to the citizen is one of the central functions of government. To fully realize it’s in providing services which meet the standard of the best quality, but at the same time with the minimum cost, the government in Ethiopia, uses the best mechanisms available, which may generally be categorized in to two. First, in areas where the private sector is considered to be at an infant stage, the government directly involves itself in the management and operation of the provision of services. The provision of electricity, telecommunication and water for instance, is under the exclusive control of government. Second, in areas which do not require direct involvement of the government, the provision of public services will be realized by involving the private sector for carrying out works and providing goods and services. Even in the second case, the government is not totally out of the picture. Public enterprises and other government business organizations equally participate in this process. Similarly, the direct provision of services by the government, to some extent allows the participation of the private sector. To a certain degree, the private sector plays a role in carrying out public works and providing goods and services in areas under the exclusive control of the government.

Irrespective of the role played and the level of participation of the government or the private sector, the provision of the best quality of services with a minimum cost, requires an efficient and effective system of public procurement. “Public procurement is a central instrument to ensure an efficient management of public resources. Promoting good governance in public acquisition system aims at providing best value to its citizens through processes that are transparent and results-oriented.”

Irrespective of variations in the existing political, economic and legal environment peculiar to a specific country, an efficient and effective system of public procurement is ultimately built upon four basic pillars: procurement laws and regulations, procurement workforce, procurement process and methods, and procurement organizational structure. Ideally, procurement laws and regulations should be clear, consistent, comprehensive, and flexible. (Khi V. Thai, procurement: concepts and practices, in International handbook of public procurement ed. Khi V. Thai p6-9).

Generally speaking, the regulatory framework of public procurement as tool in the formulation and implementation of an effective and efficient system of public procurement should be guide by some internationally accepted basic principles. These principles are: transparency, accountability, objectivity, fairness and non-discrimination.

The principle of transparency helps to attract a greater number of participation, thereby encouraging competitiveness. It also makes the whole procurement process open and fair, thus avoiding the possibility of favoritism and discrimination. Transparency also makes it easy for procuring entities and officials to be accountable. Most importantly, it is an effective tool to curb corruption.

The Ethiopian procurement law is still at an infant stage. In recent years, the Federal government has taken measures to revise the existing law, so as to make it responsive to the growth and expansion of the quantity and quality of provision of public services. Each year, a significant portion of public money is allocated as a result of  award of contracts for the construction of public works, supply of goods and provision of services…Read more.

Launch of Sh1.5tn project sets stage for lucrative bids


Business Daily

By George Omondi

March 4th, 2012

Investors are waiting for details on how the Sh1.5 trillion infrastructure project linking Lamu to South Sudan and Ethiopia will be financed following the launch of the first phase last week.

Presidents Mwai Kibaki and Salva Kiir of South Sudan and Ethiopia PM Meles Zenawi led the ground breaking for the Lamu port, which is being financed by the government.

The port is part of the Lamu-South Sudan-Ethiopia Transport (LAPSSET) corridor project, which also include a railway line, an oil pipeline, a refinery, airports, resort cities and a highway.

For a project of this magnitude, it is only when the public knows what the governments have promised in the contracts that they can judge the official seriousness and its viability,” said Mr John Mutua, a public policy analyst at the Institute of Economic Affairs.

In the build-up to the Friday ceremony, the government had indicated that it could only raise up to Sh6.9 billion of the project’s Sh1.5 trillion bill from its current budget. “Otherwise, involvement of top government officials is a good indicator that they want to see this capital intensive project off the ground and possibly, through to conclusion,” he said.

On Friday, Kenya and Ethiopia had signed an agreement in order to meet the power needs of the transport corridor.

“This day will go down in history as one of the defining moments, when we made a major stride to connect our people to the many socio-economic opportunities that lie ahead,” President Kibaki said.

How Kenya intends to finance its part of the transport corridor project, though under official wrap, has generated a lot of interest in the past four years.

The government initially signed a deal with Qatari government in 2008 to build the seaport but slowly backed out after part of the agreement was leaked to public. The contentious aspect of the deal involved allowing the Arab state to grow food crops in the Tana Delta.

In between, the government appeared to be warming up to Chinese firms for a build-operate-and transfer (BOT) arrangement to fund its part of the project. This was after their government funded the feasibility study on the project. However, intense pressure from multi-lateral lenders has pushed government officials to indicate its willingness to subject the multi-billion project to competitive bidding.

On Friday, Chinese Embassy officials declined to discuss involvement in the Lamu project saying the government was yet to give them full feedback.

“Right now, I can say we don’t want to make any comment about LAPSSET project,” said Mr Shifan Wu, chief public relations officer at China’s embassy.

Last December, the cabinet approved the Public Private Partnership (PPP) Bill, indicating that such capital intensive infrastructure projects would in future be handed to private firms on terms such as BOTs.

Analysts believe that the legal framework (PPP) will act as a magnet for private capital, allowing local and international firms with financial muscle to initially own and run such high profile assets.

While it was also not immediately clear how Ethiopia intended to finance its side of the corridor, South Sudan, which signed an agreement with Kenya to build an oil pipeline connecting the two states is believed to be scouting for multinationals to engage under BOT terms.

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