Close to 5,660 cash counting machines purchased for 1.7 million dollars have been stranded at the warehouse of the Commercial Bank of Ethiopia (CBE) following a dispute that arose between the Bank and its supplier.

Supplied by E-Banking Technology, a Korean maker of banknote counters, the machines have been held in the Bank's storage facility since April. The primary dispute is the Bank's allegation that the cash counting machines that have been delivered are different than the machines that were sent as samples and approved for purchase.

E-Banking Technology, which delivered the machines through its local partner, Impact Technology, was awarded the bid for the initial provision of 8,359 cash counting machines in mid-August 2019, with a unit price of 300 dollars. The Bank then placed an order with the company for the supply of an additional 1,027 machines in January.

Since then, the company has delivered 8,359 pieces and the remaining are en route, according to Endalkachew Bezu, CEO of Impact, which signed the local supplier contract with the Bank later in September.

Impact Technology had previously supplied CBE with 3,764 of the same cash counting machines in 2015 as a direct supplier. The company was paid 85pc of the value in advance and received the remaining 15pc after the technical test report, according to the agreement.

CBE, which had conducted an inspection of the cash counting machines, greenlighted the first 1,499 machines of the first two batches of 1,500 in December and had informed the supplier through a letter.

"After the machines had gone through initial testing," Endalkachew said. "The reports came back with positive results."

Afterwards, Impact supplied 5,000 of the machines in six rounds until it received a letter from the Bank stating that the machines failed technical inspection. In its letter, the Bank stated that a total of 3,500 machines that were supplied in four rounds failed to meet the technical requirements.

About 2,700 machines that were supplied by the company have already been distributed to branches of the Bank, while the remaining are stocked at its warehouse located in Gelan.

When CBE informed the supplier that the remaining machines failed inspection, it was deliberate sabotage, according to Impact's Endlakcahew, who believes that a senior technician at the Bank failed the machines on purpose due to a personal conflict.

By the end of April, E-Banking received a letter from the Bank requesting that they clarify the points raised during the inspection.

"The inspections were completely hair-splitting," said Endalkachew. "The technician had dismantled the entire machine and was cross-checking all 210 of its parts, which is neither the norm nor the process that it had followed initially."