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Controversy brews after the Board of the Ethiopian Electric Utility (EEU) awarded a USD five million bid for the Rehabilitation and Upgrading of a Substation Communication Equipment project to ABB Switzerland Ltd. Six companies participated in this tender which is part of a USD 200 million Electricity Network and Expansion project that will be constructed via a loan grant of the World Bank.
The Ethiopian Electric Power (EEP), which is facilitating the loan agreement, invited bidders for the construction and completion of the communication systems of 66 substations in the country hoping to solve the severe power interruptions. The bid also includes supply and installation of 48 DC batteries and chargers at 12 sub stations.
However after the board of the EEU that owns the project, awarded the bid to ABB of Switzerland, other bidders complained saying that their offer is much more competitive and lower in price.
The winner, ABB of Switzerland offered 123.9 million birr for the project, while Eltel Networks Corporation of Finland offered 110 million birr. JV of ZTE Corporation & ZTE (HK) Ltd of China offered 103.9 million birr and Huawei International Pte Ltd from Singapore offered 77.7 million birr. The other two offers came from Alstom Grid of France, 146.3 million birr, and JV of Copycat Ltd & Tejas Network Ltd. of Kenya offered 196.3 million birr.
According to documents Capital obtained, the companies that participated in the bid states that their bid document was rejected without significant reasons. These companies also complained to the World Bank which, in turn requested a detailed reason from the project office.
The World Bank’s Procurement Cycle Tracking System department wrote a letter on September 4, requesting that Girma Zeleke manager of the project provide details about the awarding process.
One of the seven points the letter states is: “the cost estimate was USD 8 million and the award is about USD 5 million which is substantially lower. Can the document better elaborate on any technical or commercial reasons for such a lower price?”
The other point is that a bid from Eltel was rejected for non-inclusion of guaranteed characteristics for 48 V DC batteries and asks “How significant are the batteries relatively to the overall price?”
Another point raised by WB is the bid document of Huawei which was rejected for a number of reasons that the bank wants further clarification on.
The bank also requests clarification of ZTE Corporation ZTE (HK) Ethiopia’s rejection based on the bid security which is not in the name of the JV partners.
The project which will be vital in curbing the sever interruption of the power problem was expected to be completed in two years.