Defence Construction Enterprise

Addis Ababa

Re: Addi Shehu – Dela - Samre Design and Build Road Project

Subject: Comment on Your Revised Advance Payment Disbursement Schedule

Dear Sirs,

Reference is made to the following letters:

1. Ref. No. መኃ 6.1R/ነ 1/6073/16 dated April19, 2019through which you have
submitted to the Employer/ERA Advance payment Disbursement Schedule in
line with sub Clause 13.2 and section IX of the Contract agreement for their kind
review and approval.

2. Ref. No. CORE/2450/19 dated July17, 2019 through which having reviewed the
Advance Payment Disbursement Schedule in line with the Contract, and found
out that the schedule is acceptable.However, pursuant to CoPA sub clause 13.2
of the contract, the Contractor should prepare a mobilization schedule and
acceptable works program (Which was not submitted by then) as per the
contract for the design and construction works in order to obtain an advance
payment and we have requested you to submitthe corrected work program as
per the contract requirement.

3. Ref. No. መኃ 6.1R/ሐ 9/588/19 dated September20, 2019 through which by

depicting that your Enterprise’s Procurement type is changed, you have
submitted Revised Advance payment Disbursement Schedule in line with sub
Clause 13.2 of the Contract agreement for our review and approval.

Accordingly, we have reviewed your submittal in line with the provisions indicated in
the Appendix to Bid and Advance Payment Agreement, and found out that your
schedule has incorporated the half of Advance Payment (50%) of the total Advance
payment with two installments each not exceeding 30%of the total Advance
payment,which shall be utilized for purchase of plant, equipment, materials, Engineer’s
facilities, etc.
However, after thoroughly reviewing your submittals and compared it with the
previous approved schedule, andfound out some issues to be addressed as detailed
below.

1. The previous accepted total amount with two installments for Item 1, Engineer’s
Facilities(Construction of Engineer’s Housing, Office, Laboratory building and
Laboratory Equipment),amounts ETB 24,365,838.25. However, you have reduced
this amount in the current submittal to ETB 662,510.22, which we strongly doubt
that you have made detailed analysis regarding this Item 1, Engineer’s Facilities,
of the revised disbursement, please correct the same.

2. The previous accepted total amount with one installment (on the Second)onItem
2.1, 2.11, 2.12, Bitumen(MC-30, MC-300, AC-60/70),amounts ETB 17,795,401.52.
However, you have increased this amount in the current submittal with
twoinstallmentsfor Item 2.12, Bitumen (AC-60/70),to ETB 162,066,870.29, which
we believe that the amountis doubtful, since the anticipated quantity exceeds the
project’s requirement, please justify or correct it.

3. The previous accepted total amount with one installment (on the first) on Item
2.14, Vehicle(Type B),amounts ETB 16,521,739.13. However, you divided in two
installments in the current submittal, since the Engineer’s Vehicle should be
concluded during mobilization period,we believe it should be in one installment
and must be on the first installment considering the mobilization period.

4. The previous accepted total amount with one installment (on the first) on Item 2,
Purchase of Equipment,amounts ETB 75,096,239.13. However, you have
discarded in your current submission,please clarify or correct the same.

Therefore, we hereby request you to clarify, justify or correct your submittal of Advance
Payment Agreementconsidering the above comments as soon as possible in order to
process the Advance Payment.

Sincerely yours,

CC: Ethiopian Roads Authority

North Region Construction Projects Management Directorate
Addis Ababa