Radar | Jan 25,2020
A Dubai-based commodities trader has received the latest round of award to supply almost half a billion Birr worth of wheat to the safety net programme funded by the World Bank.
This marks a major comeback for Promising International, a familiar name that has been involved in a series of feuds with federal government officials over issues of the unsuccessful wheat procurement process in the past. Recently, a batch of wheat worth 32 million Br delivered by Promising was rejected as it was found not suitable for human consumption.
Ethiopia imports close to 30pc of the four million tons of wheat consumed domestically. In the last fiscal year alone, the federal government has imported 1.7 million tonnes, excluding aid.
Increasingly, the procurement process of importing commodities is marred by delays, cancellations of bids, and fewer bidders participating.
Opened last month in two lots, the latest wheat tender was floated by the Public Procurement & Property Disposal Service (PPPDS), which has given the award to supply 30,000 tons of wheat to the Dubai-based company based on a request from the Ministry of Agriculture & Natural Resources (MoANR).
Promising, which has been supplying wheat to the country since 2013, was challenged by one bidder from Dubai, Falcon Bridge. The latter submitted the lowest offer but was not able to win the bid due to failures to present technical documents, including a document showing its track record and annual turnover, as well as a secured guarantee for a credit facility, Worku Gezahegn, procurement director at the PPPDS, disclosed to Fortune.
“We`ve placed our request to Falcon to present their technical documents; they have failed to respond," said Worku. “As the World Bank covers the cost of the procurement, we've followed its guidelines and received no objections before the award."
Representatives of Falcon Bridge were not available for comment despite repeated efforts by Fortune.
The first lot requires the winning bidder to transport 15,000 tons of grain to a warehouse in Adama. Promising International has offered 372.25 dollars for a metric tonne, 12.25 dollars higher than the offer made by Falcon. Promising International has also offered over 365 dollars for a metric tonne for the second lot, which requires the company to transport the same item to a warehouse in Kombolcha. This exceeds what Falcon has offered by 11.55 dollars.
Letters of credit will be facilitated by the Ministry of Agriculture, which is also tasked with taking over the procurement process after PPPDS awards go through with no roadblocks. It is PPPDS that usually carries out the procurement of wheat. However, following a dearth in supply of the grain, a recently approved directive permitted other government bodies to partake in the procurement of such items with a special request from the prime minister's Office.
The Ministry of Finance (MoF) has overseen the importation of half a million tonnes of wheat for 225 million dollars (nine billion Birr) earlier this year.
Promising International currently awaits a result of another tender floated by the Ministry of Trade & Industry (MoTI) to buy 400,000tn of wheat. Promising has also recently been chosen to supply 80,000tn of wheat to the Ministry of Agriculture for a total cost of 27.8 million dollars (1.1 billion Br).
The process of opening a letter of credit for this particular bid is almost completed, and the company will deliver the wheat before the end of June, said Habtamu Million, a local representative of Promising International.
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