10 February 2018

Ethiopia: Locally Assembled Vehicles Line-Up to Replace High-Powered Motors

Photo: Business Daily
(file photo).

Belay Ab offered the lowest offer of 350 million Br for the vehicles

Belay Ab Motors Plc offered the least price to supply 400 replacement automobiles for the high-powered vehicles government officials have been barred from using in Addis Abeba.

The Public Procurement & Property Disposal Service, procuring the vehicles on behalf of the Ministry of Finance & Economic Cooperation (MoFEC), opened the financial offer on February 09, 2018, at its premises at Sidist Kilo. Belay Ab, which has been in the business for over a decade, offered the least price to supply vehicles worth almost 350 million Br in three lots.

Mesfin Industrial Engineering Plc, Abay Technical & Trading and Marathon Motors Engineering also vied to supply the vehicles that would replace Nissans, Land Cruisers and Prados in half a year's time.

The first lot of the bid that was floated in early January includes 240 automobiles with 1,600 CC engines. And in the second and third lots, the Service required 110 cars with 1,800 CC engines and 50 cars with 2,000 CC engines, respectively.

Belay Ab, which was established with a capital of five million dollars to import light, medium and heavy-duty trucks, offered the least prices of 801,319.42 Br, 924,228.73 Br and 1.1 million Br for a DFM-model automobile in the first, second and third lots, respectively.

While Mesfin Industrial bid for the first lot only, Marathon showed interest in the first and third lots. The others - Belay Ab and Abay - participated in all three. Yangfan, of which Lifan Motors is a subsidiary, was disqualified for failure to submit the document before the opening of the tender.

Goitom GebreKirstos, a marketing manager of Mesfin Industrial, expressed his complaint before the financial offers were disclosed, saying that the assemblers participating in the bid, without naming any names, with new brands and without having opened an assembly plant can have quality issues.

Solomon Betre, chairman of the tender committee of the Service that has procured 537 vehicles since its establishment six years ago, countered by explaining that the primary concern is not the model of the cars, but the investment certificate for the assembly of automobiles.

"Failing to get a quality certification from the Addis Abeba Transport Bureau, though, will affect the outcome of the procurement," he added.

The procurement follows a directive by MoFEC to ban sports-utility vehicles (SUVs) by government officials except for trips outside the capital.

This was to reduce petroleum consumption, thus cost, encourage local assemblers and save a foreign currency, according to Assefa Solomon, deputy head of public relations at the service. It also comes at a time when accessing foreign currency has been a challenge for both public and private enterprises, with the forex reserve not able to cover a couple of months of exports, according to the International Monetary Fund (IMF).

The procurement comes in a country where more than 70 assemblers were established between 1998 and 2016, but only 18 are operational.

Belay Ab for its part uses a semi-knocked down (SKD) system in which parts of the car that have been partially put together are shipped to be assembled for sale to customers, according to Abiy Fita, chief sales representative to the Company.


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