Three firms seek tender for cement mill

Three firms seek tender for cement mill
Published: 30 May 2006

Three companies are locked in a battle to secure the tender for construction of a new mill at East African Portland Cement. The Government cancelled an earlier tendering process in which nine companies had shown interest. However, only three firms — Polysius, FLSmith and Company and IMASA — presented their bids. But IMASA’s fate hangs in the balance after it failed to present a bid bond worth Sh54 million (US$750,000) as specified in the tender notice.

All the three companies had participated in the earlier tendering process. Benson Ndeta, the company’s chairman, expressed confidence that the process would be free from any technical issues, which dogged the first tendering.

"We set tight conditions that discouraged lots of people, as we don’t want to end up with the same process as we did earlier," Ndeta said during the opening of the tender documents at the firm’s boardroom in Athi River on Monday.

Ndeta observed that IMASA’s case would be decided at a later date after the tendering committee has met. In January, the Government cancelled the first tender after the Public Procurement Complaints, Review and Appeals Board noted that the process did not follow public tendering and procurement rules.

The Sh1.6 billion tender, which had been awarded to Polysius, South Africa, was declared null and void after New Baron and Leveque International, one of the bid losers, lodged an appeal with the procurement board. New Baron and Leveque International, which failed to present its bid in the latest tendering process, argued that fresh conditions had been introduced at the evaluation stage, hence placing some tenders at a disadvantage.

The new mill, to be completed in 18 months, will shore up the cement maker’s production capacity from 750 million tonnes annually to 1.3 million tonnes. This would put the company in favourable stead to grow its market share in the region. Last year, the company reported an after tax profit of Sh593 million up from Sh252 million the previous year. The increased profitability was driven by increased cement demand that grew by an estimated 15 per cent due to the ongoing construction boom.