Corporation Cancels Bid for Dire Dawa Industrial Park

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The Industrial Parks Development Corporation (IPDC) has cancelled a highly anticipated but tightly fought bid for the design and construction of an industrial park in Dire Dawa, after two companies had made it to the financial evaluation, Fortune has confirmed.

A meeting held on Friday, December 18, 2015, by the Board of Directors of the Corporation, under the chairmanship of Arkebe Oqubay, adviser to the Prime Minister with ministerial portfolio, decided to re-tender the project after learning of confusion in the bid document on reasons for rejection, sources disclosed to Fortune.

The Corporation is set out to open no less than seven industrial parks across the country, hoping they will absorb into the labour force, up to two million people in the next five years. The federal government has earmarked close to 750 million dollars obtained from the sales of Euro Bond last year, to finance these projects.

Construction is underway in Hawassa by the China Civil Engineering Construction Corporation (CCECC), a company which is also constructing the railway line from Ethiopia’s Eastern town of Me’eso to ports in Djibouti. Bid processes to award contracts are underway for industrial parks in Adama, Combolcha, Meqelle, Bahir Dar and Jimma, all turnkeys in their project management. The one advanced is, however, the industrial park to be built on a 100,000hct plot in Dire Dawa, 515Km east of Addis Abeba.

Three weeks ago, the Corporation dropped one of the bidders, Rama Construction Plc, based on the result of the technical evaluation. CCECC and Teklebrehan Ambaye Construction Plc (TACON), which entered the bid in a joint venture with a Kuwaiti firm, were informed they could proceed to make their financial offers.

Before the opening of the financial offers though, the Corporation has opted to cancel the whole bidding process because the bidders should be clear about terms for rejection in the bid documents, a senior official of the Corporation, who requested anonymity because the case is sensitive, told Fortune.

The Corporation requires the successful bidder to demonstrate financial liquidity to prove that it can start construction immediately after the signing of contracts and without necessarily waiting for advance payments; and should demonstrate its access to foreign exchange. Domestic firms, which enter into the bid in joint ventures with foreign companies, should prove that they have a 55pc turnover of work within a given year, of the value of the project for which they are bidding. An external auditor, according to the official of the Corporation, should certify this. The project is estimated to cost more than five billion Birr, and is meant to be completed in six months.

Foreign companies in joint ventures are also required by the Corporation to show a track-record working on projects in Ethiopia, a requirement which clearly works against the Kuwaiti company that has entered into the bid with TACON.

The Corporation, managed by Sisay Gemechu, former state minister for Industry, is now to float new tender after short-listing prospective companies to bid. Although the original plan was to sign the design-and-build contract for the Dire Dawa Industrial Park in December 2015, the Board’s decision to re-tender the project will have to push this by at least another two months.

Teklebrehan, who said he just got returned from the United States on Sunday, declined to confirm the cancellation of the project. His company, however, has changed the partner in the joint venture to the Chinese South East, and he said the new partnership has spent over 30 million Br in developing a design and preparing for the bid.

“We’re certain to lodge our complaints against the decision,” Teklebrehan told Fortune.

CORRECTION: Fortune has learned that the Kuwaiti firm mentioned above played a role in a joint venture with TACON when bidding for the Hawassa  Industrial Park Project. It has no involvement in the bidding for the Dire Dawa Industrial Park Project.