Despite controversy with the government, Promising International Trading was awarded a contract to supply 75,000tn of wheat for 24 million dollars.
The international firm was previously banned by the Public Procurement & Property Disposal Services from participating in public procurements for a year, however, recently it won a contract to supply wheat for a Safety Net Programme that will be financed by the World Bank.
The bid for the supply of wheat was floated on November 18, 2019, by the Service on behalf of the Ministry of Agriculture. Since the procurement is financed by the World Bank, the screening and selection process were conducted by the Bank. The Ministry will administer and sign the agreement.
Hakan Agro and Gemcorp were the second and third lowest bidders with bids of 26.5 million dollars and 25.4 million dollars, respectively, for the supply of the wheat.
Even though Promising was deemed qualified to supply the wheat, the Service requested the Office of the General Attorney comment on the award since Promising was prohibited from participating in public procurements starting from the second quarter of the last fiscal year.
Promising was banned after it failed to supply 200,000tn of wheat that the company got in agreement with the Service. The contract was terminated after Promising requested a price revision, stating that the freight cost had been raised.
"We requested the comment of the Attorney General to avoid any controversy that may arise at the time of execution," said Melkamu Dafali, the communications director of at the Service.
The Attorney General informed the Service to write a letter to the Ministry of Agriculture and the World Bank explaining why Promising is not allowed to supply the wheat.
Even though the contractual agreement should have been signed last week, the Service is waiting for the final decision of the financier, the World Bank, according to Melkamu.
A senior executive at Promising is an optimist about the procurement, stating that the company has no corruption track record that may end up excluding it from any procurement process.
"We have no history of corruption and fraud," said the executive.
If the contractual agreement with Promising is signed, it is expected to supply the wheat in under three lots after 45 days once the contractual agreement is signed, according to Melkamu.
Promising will supply 24,500tn of wheat for eight million dollars, and it will be stored in an Adama warehouse. Under the second lot, the company will ship 28,000tn of wheat to a Kombolcha warehouse for nine million dollars. The remaining 22,500tn of wheat costing seven million dollars will be stored in Dire Dawa.
A source from PPPDS close to the case told Fortunethat Promising International Trading's case would never allow them to participate in the tender, since it was being examined by the Federal Attorney General.
"The grant might be cancelled by the World Bank if the procurement is delayed," the source said.
Since Promising International is a Dubai-based company, and Dubai companies deposit their money in Western banks, the World Bank might have the tendency to consider the participation of Promising despite the fact that it is banned, according to the source.
In the past six months of the current fiscal year, the government has procured 600,000tn of wheat. Out of this 200,00tn was awarded to Aplus Importer; 200,000tn, to Agrocrop Trading Plc; and the remaining 200,000tn, to Hakan.
However, Hakan has refused to accept the award, claiming the price of wheat in the global market has changed from the initially offered price.
While Aplus was on the way to signing the agreement, Gemcrop appealed to the Service appeal committee on the award of the bid, and currently the process is pending until the committee passes a decision.
In the last fiscal year, the government procured about 1.7 million tonnes of wheat for 11.1 billion Br.