SMART COMPANY, Daily Nation, March 14, 2006

NEW TENDER FOR CEMENT MILL

BY KABURU MUGAMBI

East Africa Portland Cement Company has readvertised the tender for a new cement mill that was cancelled by the Government in January citing “serious flaws” in the procurement process.

The tender for design, supply and installation of a new 60-tonne-per-hour cement milling facility at its Athi River plant closes on April 26, 2006. In an interview, Managing Director Ole Mapelu Zakayo said the cancellation of the tender means the project would fall two months behind schedule.

The Government’s action had put in jeopardy the company’s contract to supply more than a million tonnes of cement to Southern Sudan.

“Although we have lost the months, we are not very far behind and we believe in the next 15 months the new mill will be up and running in time to tap into the new markets, especially Sudan, he said. The new facility will ensure the company meets the needs of a growing market while considerably lowering its energy and production costs.

Portland says bidders must be established cement technology holders, who are manufacturers and suppliers of main cement production equipment and must have done similar installations in the past five years. The contractors to be used for the erection must have experience in industrial installations of similar magnitude.

All tenders must be accompanied by a $750,000 (Sh54.2 million) tender security. On what went wrong in the first tender which was cancelled, Mr Mapelu said: “Our procurement process is very elaborate, with Treasury participation, but in this case we could have forgotten about little details, for instance, not sending letters in time.”

Rules flauted

The Public Procurement Complaints Committee and Appeals Board cancelled the tender award to KMPP Polysius of South Africa, citing irregularities in the tendering process. The board said the laid down rules on procurement and public tendering were not correctly followed. Other companies that bid for the contract were Imasa Ingeniena Montajes – the highest bidder at Sh1.8 billion – KMPP Polysius of South Africa at Sh1.1 billion, SPM Engineers India, which bid at Sh857 million and FL Smith A/S Denmark, the lowest at Sh737 million. New Barnon & Leveque International bid at Sh2.1 billion.

New Baron & Leveque, FL Smith and Polysius met all the criteria, while the other two were disqualified on technicalities. The tender committee accepted Polysius’s bid, which was also ratified by the Portland’s board. The tender was cancelled following an appeal by New Baron & Leveque International, one of the shortlisted bidders, which claimed that new criteria were introduced at the evaluation stage, hence disadvantaging some tenderers.

Leveque said that between September and October last year, members of the technical and financial evaluation committee visited the countries of operation of the three shortlisted bidders.

New prices

After the visit, the three submitted revised prices and specifications, which was done orally in breach of the tendering regulations. The new prices quoted after the visits increased by between Sh300 million and Sh500 million Leveque said in the appeal.

These visits were done after the tender opening on June 15,2005, while the evaluation process was in progress,” the board said in its ruling. “We have also noted that the successful tenderer did not have the lowest prices in both instances; at the tender opening stage and at the financial evaluation stage.”

Last year, demand for cement went up by 15 per cent compared to the previous year, following increased orders from the construction industry.

The turnover rose from Sh2.5 billion to Sh3.1 billion. “The company is faced with a rapidly increasing demand and the challenge is how to increase its capacity,” Mr Mapelu said.