Agency Denies Bid Protest Over Dukem Depot Project

The claimant complains unfair measures were taken while awarding SMEC

A complaint filed by a UAE based Company over the fairness of the procurement process to hire a consultancy firm for the Dukem Oil Terminal was rejected by the Public Procurement & Property Administration Agency.

The grievance hearing board of the Agency rejected the claims by ILF Consulting Engineers, a bidder for the project, stating that it is only mandated to regulate the procurement processes of government institutions, not public enterprises. ILF lodged its complaints a month ago, listing a couple of points it stated as flaws in the process of selecting and awarding the project to the Australian Company SMEC International PTY Ltd. In its letter, ILF complains that unfair measures were taken to award SMEC which made the highest offer for the project.

The Ethiopian Petroleum Supply Enterprise (EPSE) awarded SMEC the project for close to a quarter of a billion Birr under a contract signed two weeks ago. SMEC was established in 2017 after a merger of two companies, Surbana Jurong Group and Robert Bird Group.

ILF had competed for the project along with six other companies under a tender issued at the beginning of this year. Only SMEC and ILF passed the technical evaluation. After the financial bid documents were opened on April 16, 2018, the Enterprise declared that SMEC International PTY Ltd had offered the lowest price of 7.7 million dollars in addition to 26 million Br, while ILF Consulting Engineers came as the second lowest bidder with 10.9 million dollars offers.

"SMEC offered 10.5 million dollars and 26 million Br, during the financial opening," reads a letter from ILF, a company which was founded in 1967 and mainly engages with consultancy and engineering works on oil, gas and energy.

Hence, the Enterprise unlawfully amended the figures stating arithmetical error was made while calculating the offer, claims ILF in its letter, which was filed to the five-member board composed of the Ministry of Finance & Economic Cooperation, Ethiopian Chamber of Commerce & Sectoral Associations, Ethiopian Road Authority, Ministry of Trade and the Agency.

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"We could not review their case, as we can only examine complaints from governmental budgetary institutions," said Setegn Gelan, director of communications at the agency.

Tadesse Hailemariam, CEO of the Enterprise, claims that there was no flaw in the process except for some mathematical errors which were corrected instantly.

"We properly followed the procurement law of the nation," said Tadesse.

The Oil Terminal is going to be constructed with the primary aim of raising the fuel reserve capacity of the nation by 65pc. The new terminal, estimated to cost the country three billion Birr, can reserve 240 million litres of petroleum, which will boost reserve duration of the country to 65 days from the current 36.

Representatives of ILF failed to comment on the issue while approached via email. Whereas Fikre Kebede, country manager of SMEC Ethiopia, declined to comment on the issue, stating any information has to disclosed by the main office.