Hawusewa Abala

CONSTRUCTION SECTOR TRANSPARENCY
INITIATIVE (CoST)- ETHIOPIA
REPORT ON INFORMATION PROVIDED
BY
ETHIOPIAN ROADS AUTHORITY
FOR
HAWUSEWA-ABALA-IREBTI ROAD PROJECT
FINAL REPORT (COMBINED)
December 2010
LIST OF ACRONYMS / ABBREVIATIONS
MPI Material Project Information
BOQ Bills of Quantity
GCC General Conditions of Contract
CoST Construction Sector Transparency Initiative
ERA Ethiopian Roads Authority
TAC Tender Analysis Committee
CAC Contract Award Committee
GM General Manager
DG Director General
DDM Deputy Director General
Gov Government of Ethiopia
DBST Double Surface Treatment
AC Asphalt Concrete
LCB Local competitive bidding
ETB Ethiopian Birr (local currency)
MSG Multi Stakeholder Group
PPA Public Procurement & Property Administration
PE Procuring Entity
RE Resident Engineer
RFP Request for Proposals
RFI Request for Inspection
EOI Expression of interest
ToR Terms of Reference
VAT Value Added Tax
VO Variation Order
December 2010
TABLE OF CONTENTS
List of Acronyms 2
1 Summary 3
2 Introduction 3
2.1 Background 4
2.2 Objective of pilot programme 5
2.3 Data Collection & Verification Process 6
2.4 Pilot Project----Beredimtu-Imi Road Upgrading Project 7
3. Verification on Material Project Information 8
3.1 Procedures For Selection Of Design& Supervision Consultants 8
3.2 Project Identification & Budget 9
3.3 Selection of Design Consultant 9
3.3.1 Evaluation Process 10
3.3.2 Appointment 11
3.4 Selection of Supervision Consultant 11
3.4.1 Evaluation Process 12
3.4.3 Scope of works 13
3.4.4 Implementation phase 13
3.5 Selection of contractor-Works Contract 14
3.5.1 Tender procedure 14
3.5.2 Documents Provided 14
3.5.3 Initial Tender 15
3.5.4 Retendered Bid Evaluation 16
3.5.6 Implementation Status 17
4.0 Analysis 20
4.1 Appointment procedures 20
4.2 Contract for Supervision of works 21
4.3 Works Contract 22
Appendix I- Material Project Information
Table 1. Analysis of changes for contract time, price
Table 2. Analysis of changes for contract terms
Appendix II- Schedule of documents disclosed
Pilot Project Team Member Team Leader

Gugssa Tadesse Yaregal Ali
Hawusewa-Abala-Irebti Road project
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1.0 Executive Summary
CoST is a multi-stakeholder initiative designed to enhance transparency in the construction
sector in order to enhance the accountability of procuring bodies and construction companies for
the cost and quality of public sector construction projects.
This initiative is being piloted in seven\countries, and Ethiopia lately joined the programme. As a
result, CoST – Ethiopia engaged individual professional to verify and analyse MPI (material
project information) disclosed by Procuring entity (PE)
The report gives reference to the TOR of the consultancy agreement, Guidelines procedures for
data verification & analysis, templates for disclosure of MPI and made use of data and
documents disclosed by the procuring entity, ERA, with respect to the specific road project
A summary of the findings, background of the pilot programme, objective & tasks of assurance
team, activities to be undertaken in verification of MPI disclosed by ERA is discussed by the
report. The report deals with project information which covers the project cycles from inception
to the recent implementation status of the road project.
The report summarizes findings on phase I and phase II of assurance team assignment under
each heading
Few documents /information are missing to cover fully some processes in the project cycle. A
request for additional information was forwarded by CoST-Ethiopia Coordination but not yet
received until compilation of the report. The list included feasibility study reports, explanation
for launching re-tenders, short listing criteria, Engineer‟s estimate with breakdowns
The information provided in the documents is verified and counter checked with the consulting
firm but the contractor couldn‟t be approached as the representative is on site.
KEY FINDINGS:-
1.1 APPOINTMENT OF CONSULTANTS
1.1.1. Tender procedure for appointment of consultants for design and supervision services is
a two stage and evaluation was conducted as per PPA-2006. However shortlist
formulation criteria are not addressed in any of the documents. A request for the
information was forwarded through CoST coordination office but not received until
compilation of the report

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1.1.2 Inconsistency in evaluation
No evidence could be traced in the documents disclosed to us weather the appointed

contractor for works contract has fulfilled qualification requirements on performance
and specific construction experience as stated in the bidding document. ERA sent a
letter to Ethiopian Embassy in china requesting to confirm performance of the bidder;
the response didn‟t address the specific issue. On the same bid one Chinese contractor
was rejected for not fulfilling the same requirement (poor performance on ongoing
projects in Ethiopia). Further a letter issued by Chinese Embassy in Ethiopia informed
ERA that the Bidder was barred by contractors association in the country of
establishment.
1.1.3 At the conclusion of post qualification examinations it was also noted that all proposals
/qualification applications/ declared post qualified sustained varying degree of
drawbacks with respect to fulfilment of minimum qualification requirements as set in
the bidding document in relation to work schedule and methodology , provision of
construction equipments & key personnel . Opening of financial proposals was decided
on conditions that satisfactory clarifications, confirmation or /and additional
information be sought from each bidder in case the bidder be found successful. Not
clear to what extent a qualification application could be tolerated or the qualification
requirement could be negotiated, no document was provided to us with clarification of
the same.
1.2. CONTRACT IMPLEMENTATION PHASE
1.2.1 The Consultant for supervision of works has conducted a design review and the report
was forwarded to ERA in August 2010. The effect on contract time and contract price
could be made known after review and endorsement by ERA.
1.2.2 A variation order was issued to change specification of facilities to be provided for use of
Engineers‟ staff, which has reduced the contract price by ETB 5, 8829,718
1.2.3 The contractor has filed two compensation events which has effect on contract time and
contract price. The cases are being studied by the consultant and ERA and yet not
finalized. The outcome could be only known after deliberations are made by the client.
1.2.4 A delay in progress of works contract was reported in the annual report ( June end
2010,) as per Engineers valuation. 679 calendar days (53.89% of contract time) had
elapsed and the contractor has managed to complete only 20.44kms (22%) in weighted
average against a plan of 28.92 kms (30.9%). Main reasons highlighted by the
consultant are delayed mobilization of resources and inefficient utilization. The
cumulative delay up until June, 2010 is 9%. It anticipated, progress could improve as

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the contractor commences execution of pavement items which has a higher weighting
per unit of accomplishment compared with earthwork items.
1.2.5 The contractor has not yet provided clause 14. programmes of works acceptable to the
Engineer, which is uncharacteristic to experienced foreign contractors. The contract
requires master work programme be submitted within 28 days of receipt of the letter of
acceptance. It was reported that up until June 2010 there were several submissions and
resubmissions of programmes but until the reporting period the project doesn‟t posses
approved programme which is instrumental in determination of claims. ERA has
written warning to the contractor with regards the issue on June 2010.

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2. Introduction
2.1 Background
The Construction Sector Transparency Initiative (CoST) is an international multi- stakeholder

programme designed to increase transparency and accountability in the construction sector. It is
supported by the UK Department for International Development (DFID) and the World Bank and is
currently being piloted in seven countries.
The Construction Sector Transparency Initiative (CoST) aims to increase the accountability of
public sector organisations and construction companies for their construction projects. It will do this
by disclosing Project Material Information (MPI) at all stages of the construction project cycle,
from the initial identification of the project to the final completion.
It is, however, recognised that the disclosure of this information may not be sufficient on its own to
achieve greater accountability. This is because some of the information is likely to be complex and
not easily intelligible to the general public. For example, there are many reasons for time and cost
overruns on construction projects that may be quite legitimate and not necessarily an indication of
poor governance of the procurement process.
This pilot is led by the CoST-ETHIOPIA Multi-Stakeholder Group, which comprises

representatives from the Civil Society, Contractors' Association, Association of Consulting
Engineers and Architects and Government.
A number of projects have been identified by the Multi-Stakeholder Group for the pilot assurance
process in Ethiopia. One of the selected projects is Hawusewa-Abala Road project. Responsible PE
for management of the construction cycles is Ethiopian Roads Authority (ERA).
To ensure that the information that is released is both accurate and available in a form that can
easily be understood by stakeholders it is verified and interpreted by experts appointed for this
purpose -- the assurance team.
This report has been prepared by Gugssa Tadesse, a team member who carried out the information
review of the project under the pilot study.

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2.2 Objectives of the pilot programme
The National Multi-Stakeholder Group has identified four objectives for the pilot:
 To learn lessons to inform the design of CoST internationally
 To learn lessons that improves transparency internationally through the disclosure of project
information.
 An enhanced understanding of construction project costs amongst public sector clients,

industry and wider society
 To learn and share lessons on publicly-funded construction project governance
. The assurance team has been appointed to carry out the following tasks:
 Collect the project information
 Verify the accuracy and completeness of the information
 Report on the extent and accuracy of the information which has been released
 Analyse the information and make informed judgements about the cost and quality of the
project
 Report on the findings regarding the cost and quality of the project and highlighting any
outstanding questions.
2.3 Data Collection & Verification Process
 CoST- Ethiopia has signed memorandum of understanding outlining schedule of project

information and documents to be disclosed by the procuring entity for the pilot programme
on selected projects

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 ERA has appointed two of its staff to liaison with assurance team members and coordinate
information disclosure in their respective departments i.e. one for the cycle from inception
to tender process and one for implementation stage of the construction process
 Each Assurance team member had to contact the liaisons in ERA and through them counter
part engineers, assigned to follow up each project, for documents. Then documents are
copied and the original returned back to ERA.
 In between the data collection process a meeting was arranged with deputy director of ERA
in the presence of all Department managers, aiming to evaluate status and coordinate
document disclosure. The meeting was held at the request of coordination office of CoST -
Ethiopia. In the meeting ERA also committed to notify contractors and consultants
regarding the assignment of assurance team.
 The information provided was reviewed to obtain understanding of the project
 The schedule of project information which ERA was expected to disclose under the pilot
programme is set out in Appendix 1. We have completed the schedule by identifying the
information required from the documents provided.
 The documents disclosed in hard copies in connection with the project are the followings:-
 Hard copies of Tender evaluation reports dealing with selection and appointment
of design consultant, works contractor and supervision consultant
 Documents relating to project monitoring and contract administration i.e. recent

copy of payment certificate, recent annual progress report, contract document for
the works and supervision contract
 Documents dealing with project feasibility , bidding documents of successful

bidders for service and works, reports on Engineers‟ estimate , project appraisal
reports , notices on expression interests and internal procedure for short listing are
not provided

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2.4 Hawusewa-Abala –Irebti Road Project
The road project is a shortcut access between Tigray region and eastern part of AFAR region which
is rich in salt and other minerals resources. The project road length is 90.60kms and starts at a
junction on Mekelle-Quiha main road and terminates at Irebeti. The project involves construction of
the road with asphalt concrete surfacing (AC) having 7mts width and 1.5 mts un-paved shoulder
both sides in rural sections and 19mts in town section. The town section includes 3.5 meters parking
lanes & 2.5 meters wide footpaths at both sides of traffic lane. The upgraded road shall have DS4
standard as per Geometric manual of ERA, 2202.
The scope of works also includes construction minor drainage structures, of varying sizes and
bridges. The road intended to facilitate domestic market of salt and other minerals as narrated in the
report
HEC-UNICONE-HAMDA JV was appointed to carry out a detailed design of the project. Project
Management of the contract and supervision of works during the construction stage is being
provided by TCDSco. Up to April,2009 as a temporary assignment until commencement of the
Engineering firm, ICTE in JV with ICT and OMEGA , joint venture of Indian & Ethiopian firms
who is permanently appointed for duration of project programme , while construction of the of the
road is being executed by a Chinese construction company, Jiangxi Zhogmei Engineering
Corporation Limited.
3. Verification on Material Project Information
3.1 Procedures for Appointment of Design & Supervision Consultants
Procedures followed by ERA in selecting design & supervision consults of this particular project as
set out in the reports is hereunder summarized:-
 All the work on the design and construction supervision of the project is awarded to
consultants and contractors on competitive basis.
 ERA prepared shortlist of consulting firms and send a letter with RFP (request for proposal)
while selecting Design consultant. Supervision consultant was selected after the PE advertized
a notice for expression of interest in a local news letter, Ethiopian Herald, and UNDP web site

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after which ERA prepared a short list out of interested bidders and sent request for Proposal
(RFP) addressed to each.
 Pre –proposal meetings arranged at prescribed date on RFP. ERA representative gave
clarifications to queries received on and before the meeting. The answers and minutes of
meeting were distributed to all before deadline date.
 Tender Analysis Committee (TAC) were organized for each contract consisting of
Engineers from within ERA
 Two stage Evaluation of bids was adopted for selection, as stated in the RFP, first technical
proposals are evaluated points allocated as in the bid and breakdown of scores prepared by
TAC members. Each proposal was evaluated out of 100 points and those scored above the
minimum score in RFP considered technically responsive.
 TAC prepared evaluation reports with their recommendation and highlighted issues and
present to Contract Award Committee (CAC). CAC decides on report and forward it to the
director general for approval
 Financial Offers are opened in the presence of CAC members and representatives of
consultants and Evaluated by TAC as per the criteria in RFP and each offer scored out 100, and
finally prepares combined score which is the sum of 80% of technical score and 20% of
financial score. A report is prepared and presented to CAC for endorsement.
 Documents presented are complete to understand the process
3.2 Project identification and budget
As reported above feasibility study document and project appraisal report is not yet provided to
the assurance member.
 Detailed Engineering Design and tender document preparation as phase I was carried out by
Joint venture of three local firms, HEC-UNICONE-HAMDA JV. We are provided with copies
of the Technical evaluation and combined (technical & financial) evaluation reports.

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 The scope of service of the design consultant covers the road stretch from Afdera to Abala,
which is approximately 216 kms. Hawusewa-Abala is one lot in the stretch
 As stated in the final bid evaluation report, the Engineer‟s Estimate was prepared by HEC-
UNICONE-HAMDA JV in April, 2008.
 The Engineering estimate was ETB 826,584,577.08. Arithmetic errors were corrected by
TAC to the final price of ETB 826,421,597.88. the amount of correction was (-162,979.20) it
arises from rounding errors and quantity difference in selected bill items
 Report on engineer‟s estimate not yet provided for detailed analysis. A request was addressed
to ERA through CoST coordination office.
3.3 Appointment of Design Consultant
The following documents were provided in relation with the appointment of design consultant
1. Technical evaluation report
2. combined (financial +technical) evaluation report
3.3.1 Evaluation process
 Request for proposal (RFP) addressed to five local shortlisted consulting firms was issued
by ERA on 9 June 2005 and then after Pre-proposal meeting was held on July 12, 2005
and ERA clarified to queries forwarded by representatives before the meeting and during.
The minute with clarifications to queries was sent to all invited shortlisted consultants
.Names of shortlisted firms are
I/N Companies invited Country,

1 Associated Engineering Consultants Ethiopia
Registration
2 DANA & Associates consulting plc Ethiopia
3 Construction Design Share company (CDSCo)in Ethiopia
association with civil works consulting
4 engineers(CWCE)
HEC-UNCONE-HAMDA JV Ethiopia
5 SABA Engineering plc Ethiopia

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The scope of services as per RFP
 Phase I. Detailed Engineering Design & Tender Document preparation

 Phase II. Construction supervision
 The service is to cover the project Afdera-Abala, nearly 216kms while
Hawusewa- Abala –Irebeti is one lot
 Two stage procedure was adopted ,as stated in the RFP , for selection
 Among the shortlisted companies who were invited , three (3 )consulting firms have
submitted their technical and financial proposals before the deadline date , August 16,2005 ,
2.30pm in separate sealed envelops . At the opening session ,in the presence of ERA contract
award committee members (CAC) and representatives of firms, the envelopes containing the
technical proposal were opened after checking the sealing and markings and technical proposals
handed over to tender evaluation committee (TAC) to be evaluated in detail
 The technical proposals of were examined with respect to specific experience of the
consultant related to the assignment, adequacy of proposed work plan and methodology and
qualification and competence of proposed personnel for the assignment. Each member
independently evaluated and points were allocated. Depending on the average scores , the
committee finally submitted evaluation report , identifying the three proposals as technically
responsive with scores as tabulated
I/N Firm name Technical scores,%

1 Construction Design Share company (CDSCo)in 83.4
engineers(CWCE)
2 HEC-UNCONE-HAMDA JV 75.7
3 SABA Engineering plc 78.3
 CAC on its meeting held September 16, 2005 discussed and endorsed the recommendation
which was approved by GM, of ERA on 11, October, 2005. Minutes of meetings is
attached to the evaluation report.
 Following endorsement and subsequent approval by GM of ERA, a notice was addressed

to the firms, setting the opening date for financial proposal on 13 October, 2005.The
financial offer was opened and their respective prices readout as per the procedure. The
readout bid prices for each consultant were as tabulated here under:-


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I/N Firm name Price ,ETB
1 Construction Design Share company
(CDSCo)in association with civil works 22,530,731.00 Including
consulting engineers(CWCE) .TAX
2 HEC-UNCONE-HAMDA JV 12,626,040 Excluding TAX
3 SABA Engineering plc 17,405,455.50 Including
TAX
 TAC has examined the offers and after correcting arithmetic errors and filed negotiation
points has determined the aggregated score of technical and financial evaluation results as
tabulated below and recommends HEC-UNICONE-HAMDA for contract award
negotiations for the total cost of ETB 3,195,275.00 for phase I & ETB 11,208,153 .00 for
phase II. The prices are includes 10% contingency and 15% VAT
I/N Firm name Technical,80 Financial,20 Combined

1 Construction Design Share company (CDSCo)in 66.7 12.8 79.5
engineers(CWCE)
2 HEC-UNCONE-HAMDA JV 60.6 20 80.6
3 SABA Engineering plc 62.6 13.1 75.7
3.3.2 Appointment
 Contract awarding committee held a meeting on 27 October 2005 and endorsed the
recommendation to award HEC-UNICONE-HAMDA JV the contract for a total price of
ETB 14,403,428.00 including 10% contingency of ETB 886,020.00 for phase II and ETB
1,878,708.00 for 15% vat and the same was approved by GM,ERA on 21 october,2005
Since the contract for detailed design covers a larger road section, Afdera-Abala , within in
which lies Hawusewa –Abala as one section /(lot) all information related with execution and
appointment of design consultant ought to be separately verified as the information isn‟t limited
to one lot . The information provided is just to give an over-view on who has conducted the
detailed design and how it was selected.
3.3 Appointment of supervision consultant
The following documents were provided in connection with the appointment of supervision
consultant
 Technical and combined evaluation reports
 Contract document
 Recent payment certificate and annual progress report ,end of June,2010

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3.3.1 Tender –Initial
Initially the project was tendered in July, 2008(procurement reference No S/18/08) and 6 firms
(one local & five international) were shortlisted and invited. Following technical and financial
evaluation results, Contract Award Committee on 6th of August 2008, has endorsed TAC report
to award Intercontinental Consultants and Technocrats private .ltd (ICT) India, in JV with
International Consultants & Technocrats Ethiopia (ICTE) and Omega Consulting Engineers
with a total cost of ETB 12,610,325.00 and EURO 416,725.50 including taxes and same was
approved by the General Manager. But a rebid was advertised on November, 2008 and reason
for calling off wasn‟t given in the documents disclosed
3.3.2 Re-Tendered Bid Evaluation Process
At certain stage a decision was passed to retender the bid. Reasons for retendering couldn‟t be
traced from available documents; explanation was requested but not availed up to compilation
of the report
 An advertisement for expression of interest (EOI) was published in a news paper,
Ethiopian Herald and UNDB web site on November 7& 8, 2008.
 Request for proposal (RFP) addressed to six shortlisted consulting firms was issued by
ERA and then after Pre-proposal meeting was held on December 17, 2008 and ERA
clarified to queries forwarded by representatives before the meeting and during. The
minute with clarifications to queries was sent to all invited shortlisted consultants .Names
of shortlisted firms are
I/N Companies
1 Sheladia associates, inc USA in JV HITCON Engineering plc
2 ICT (India) in JV with ICTE& OMEGA Consulting Engineers plc
3 Roughton international in JV with BEZA consult (Ethiopia) & Beza consult
(Kenya)
4 Engis Bceom Int. LTD in association with Associated Engineering consultants
5 SNC-LAVALIN International Inc(CANADA)
6 Renardet Ingenier Conseils in ass. With SAUTI s.p.a and United consulting
Engineers (UNICONE) JV
 Among the six shortlisted companies who were invited , four (4 )consulting firms have
submitted their technical and financial proposals before the deadline date , January
13,2009 , 2.30pm in separate sealed envelops .
 Each technical proposal was examined by TAC and points were allocated with respect to
main criteria as set in the RFP and detailed criteria (break down of main criteria) set by the
committee and points were allocated. The committee held a meeting and discussed their
findings and discrepancies on the ratings and determined the average score.
 Depending on the average scores , the committee finally submitted evaluation report ,
identifying the four proposals as technically responsive with scores as tabulated

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I/N Firm name Technical scores,%
1 Sheladia associates, inc USA in JV HITCON 93,6
Engineering plc
2 ICT (India) in JV with ICTE& OMEGA Consulting 90.1
Engineers plc
3 Roughton international in JV with BEZA consult 81.2
(Ethiopia) & Beza consult (Kenya)
4 Engis Bceom Int. LTD in association with Associated 80.7
Engineering consultants
 CAC on its meeting held January 23, 2009 discussed and endorsed the recommendation
which was approved by GM, of ERA on 04 February, 2009.
 Following endorsement and subsequent approval by GM, a notice was addressed to the
two firms, setting the opening of financial proposal for 12, February, 2009.The financial
offer was opened and their respective prices readout as per the procedure.
 TAC has examined the offers and determined the combined scores of each firm. The result
is as tabulated
Technical Financial Combined
I/N Firm name scores, score out score out
out of 80 of 20 of 100
1 Sheladia associates, inc USA in JV HITCON 74.88 16.12 91.00
Engineering plc
2 ICT (India) in JV with ICTE& OMEGA Consulting 72.08 20.00 92.08
Engineers plc
3 Roughton international in JV with BEZA consult 64.96 14.41 79.37
4 Engis Bceom Int. LTD in association with 64.56 10.51 75.06
Associated Engineering consultants
 The Tender Analysis Committee had recommended contract award negotiations with the
consulting firm No 2 above, who got the highest score as per their evaluation result, with a
total price of ETB 11,309,330.50 and EURO 380,593.00 inclusive of VAT, with list of
conditions to be agreed and confirmed by the firm before award.
3.3.3 Appointment
 CAC on its meeting held, February 17, 2009 has endorsed the report to award the contract
for construction supervision of the project as recommended and the same was approved by
Director Genera (ERA) on 23 February, 2009.
 Pre contract award negotiation was concluded on February 27, 2009 on points, put as
condition to be clarified or agreed before award in the final evaluation report‟ Contract
agreement was signed on 20, March 2009 for the contract price of ETB 11,309,330.50 and
EURO 380,593.00 incl.15%VAT for duration of 42 months of construction period and 12
months of defect liability period.

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3.3.4 Scope works of supervision contract
 Fulfil the role of Engineer/ Engineers representative as set out in the contract
 Design review
 Supervise construction of works on behalf of the client throughout the construction
period including defect liability period, as stated in the contract agreement
3.3.5 Implementation stage

 As of end June, 2010, 679 calendar day‟s i.e. 53.89% of contract time has elapsed and
ETB 2,476,271.87 and EURO 78,908.27 was certified to the consultant
 The consultant has produced a design review report and has submitted to ERA on mid
august 2010. As discussed with the consultant on 24/08/10. The report covers all
section of road and it required for the consultant complete rework of the original
design, starting from ground surveying and anticipates variation. Comment is awaited
from ERA,
The information presented was confirmed by the consultant for accuracy and is complete
3.3.6 Temporary Assignment of Transport Construction Design Share Company (TCDSCo)
 The works contract has commenced on 21st August 21, 2008 while the supervision
consultant was appointed on 20, March 2009 therefore to fill the gap TCDSCo was
nominated and assigned for supervising the works contract until April 03/2009 until
appointment of supervision service consultant.
3.4. Appointment of contractor
3.4.1 Tender Procedure
 The tender procedure is an open tender, local competitive bidding, whereby interested
contractors fulfilling administrative requirement of the notice shall buy the bid document
and prepares their qualification applications and financial offer
 Tender evaluation committee will verify and check for substantial responsiveness of the
applications to be followed with detailed examination of technical and financial status.
 The committee prepares post qualification evaluation report and presents to CAC which
give its deliberation (, comment & revise or forward to the GM) ,if approved a notice will
be issued to responsive bidders stating the opening date of the financial proposal . The
prices are then readout in the presence of their representatives and CAC committee
members
 TAC will receive copies the proposals and examine completeness and substantial
responsiveness; check for errors in engineering estimate, provisional sums and considers
any discounts and modifications. Finally comparing the price with engineering estimate
will present its recommendation to CAC, which will revert or endorse the report, after
which the report passes to GM and finally to Board of Directors.
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3.4.2 Appointment of Jiangxi Zhogmei Engineering Corporation Co.ltd
The under listed documents are provided in relation with the appointment and status contract
implementation phase
 Tender evaluation reports (post qualification and financial) under procurement
reference NO W/04/08
 Annual progress report ,June 2010
 Copy of payment certificate No 9,
 Contract document ( agreement, GCC,SCC,BOQ,etc)
3.4.2.1 Tender evaluation process
Notice for invitation to bid for the project Afdera-Abala Road project contract
1,Hawusewa-Abala-Irebti, under ref No w/04/08, was published on Ethiopian Herald and
UNDB web site on November 7& 8, 2008on January 25,26,27, 2008
 Ten (10) applicants had collected the tender documents, pre-bid meeting was scheduled
on february21, 2008, but no bidder has attended the meting. Three (3) addendums and
response to written queries was issued to all bidders between march 13,2008 and march
27,2008
I/N Contractors Country Response to tender
1 China Tesiju Civil Engineering co ltd China Collected& submitted
2 SUR Construction plc Ethiopia Collect application
3 China Gezehouba Group Limited(CGCC) China Collected& submitted
4 Keanegnam Enterprise Ltd Korea Collect application
5 HIGLEIG PETRPLEUM Services & Investment Sudan Collect application
6 Co.Ltd
Transtech Engineering Corporation (TEC) China Collect application
7 Ahnet Aydniz Construction Co.Inc Turkey Collected& submitted
8 DMC Consytruction PLC Ethiopia Collect application
9 Jiangxi Zhogmie Engineering Construction Co.Ltd China Collected& submitted
10 Sinohydro Corporation Limited China Collected& submitted
 Five (5) bidders of had submitted their application and financial offers before April
8,2008.Tender analysis committee in the course of its analysis has rejected, China
Gezhouba Group Company Limited (CGGC) for poor performance on ongoing projects
in Ethiopia, i.e scoring 2.68% vs. 4.52% expected.
 Tender analysis committee finalized its report and declares the four bidders post-
qualified, thus, conditionally accepted two Chinese bidders whose performance record
was unknown. ERA has requested Ethiopian embassy in china to check for their current
performance on ongoing projects in China. The other two were accepted
unconditionally. CAC agreed and endorsed the report on a meeting held
29,february2008 and the same was approved by GM ,ERA,
 On 7, May 2008 the financial offers of post qualified bidders were opened and the offers
were read out. Tender analysis committee had examined completeness of bid, checked
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substantial responsiveness, correction of errors and consideration of discounts &
modifications, comparison with Engineers estimate. Correction on arithmetic errors was
made on Engineers‟ Estimate by ETB 162,980.10 to a corrected amount of ETB
826,421,597.88
 A letter was received from Ethiopian Embassy in China but it was short of mentioning
performance status on on-going projects of those bidders conditionally qualified as a
result of post qualification evaluation.
 CAC has also received a letter fro china embassy in Ethiopia on May 08, 2008 stating
that Jiagxi Zhogmei Construction Co Ltd was punished by Chinese international
Contractors association.
3.4.2.2 Award of contract

 TAC concluded to recommend Jiangxi Zhogmei Construction Co Ltd for pre contract
award discussion and eventual award for the construction with corrected price of ETB
746,341,435.49 inc. provisional sums, contingencies and VAT as the lowest evaluated
bidder and the same was endorsed by CAC on 08 May, 2008 on condition. CAC
suggested that Ethiopian embassy in china be requested to clarify the issue of
punishment of the bidder as informed by Chinese embassy in Ethiopia and evaluate
causes and impacts of the punishment before award. The Minutes was approved by
Director General, ERA on the same date
 A pre -contract award meeting was held on 4 June 2008 to clarify, confirm and agree on
points identified during post qualification and financial bid evaluations. No records in
the disclosed documents weather the conditions are meet nor not.
 Letter of acceptance was issued to the contractor, Jiagxi Zhogmei Construction Co Ltd,
13 June 2008
 On 4,July 2008 a contract agreement was signed for construction of Afedera-Abala rod
project ,contract 1: Hawusewa-Abala-Irebti for contract amount of ETB 746,341,435.30
including 10% contingency, specified provisional sums and 15% VAT
 The project is intended to be completed with in 1260 calendar days. The contractor was
notified of commencement date to be 21, August 2008 and completion date to be 20,
June 2012
3.4.2.3 Implementation phase
 Variation order was issued amounting to ETB 5,829,718.00. The reasons are change in
specification of Vehicles and houses to be supplied to the supervision consultant i.e.
Type “A” houses& vehicles are changed to Type” B” ones, this brought reduction in
cost to the client. As a result the contract price has reduced to ETB 740,511,717.30 inc.
provisional sums, contingency and 15% VAT.
 The contractor has filed two claims on 12, February 2010 for compensation of ETB
15,000,000.00 and 8 months of extension of time. The consult has responded with
remarks on March 18, 2010. The second time the contractor has contended for 8 months
extension of time extension and financial compensation of ETB 20,000,000.00 and is
being reviewed by the consultant.

18
 On going evaluation of the project ,up to June 2010, by the supervision consultant
reveals that the contractor has a slippage of 15.80% with respect time and 9.06% with
respect its schedule .679 calendar days (53.89% of contract time ) elapsed and the
contractor has managed to complete 20.44kms(21.84%) vs. a plan of 28.92 kms(
30.9%)
 The contractor has not provided clause 14.1 programme within the time stated in the
contract.
 With regards the payment for works executed, 9 interim payment certificates are certified
up to end of June 2010to amounting to ETB 140,012,797.60, after all deduction as per
the contract and including 15% VAT.
The information provided with regards implementation phase was checked and confirmed with
the consultant firm but the contractor couldn‟t be reached

19
4.0 Data analysis
4.1 Approach to awarding contracts

 The Consultant for detailed geometric design and contract document preparation of the Road
from Afdera-Abala, of which Hawusewa-Abala (the contract) constitutes a section of
road within the bigger lot, was selected from among shortlisted firms who had been invited
by ERA. The procedure has potential for time savings in procurement process but the
criteria for short listing wasn‟t clarified in any of the documents
 Since the scope of works of the design consultant was not limited to this particular project
but covered a longer stretch, divided in 3 lots during implementation, I found it beyond the
scope of service of AT assignment, thus further analysis on its implementation phase was
not conducted.
 Tender for supervision services were floated twice. The initial process was revoked after the
evaluations are complete and winner made known. No explanation was given in the
documents.
 The consulting firm for supervision service -ICTE in JV with OMEGA and ICT, was
appointed as a result of re-bid evaluation from among six shortlisted firms. Evaluation
process was inline with the procedure but no evaluation report for forming the initial
shortlist was disclosed.
 The approach to awarding contracts, based on a combination of price and quality, provides
some degree of balance between the tender price for a project and the quality of the service
to be provided by the supplier. In this way, it reduces the likelihood of the contract being
awarded at an unrealistic price, whilst retaining a substantial degree of competition on
competence.
 The Contractor for Works Contract of this project was appointed as a result of competition
through open bidding as often being done in ERA for selecting contractors. I.e. tenders are
floated in news magazines or known websites and interested bidders are requested to file
applications and submit financial offers as per the terms and conditions in the biding
document. This allows equal opportunity and participation for construction companies and
intends to achieve benefits of competition and reasonable financial offer.

20
The under listed issue are noted in the evaluation reports:-
 As per the qualification requirement of bidding document, bidders are required to

have successful performance on on-going projects however no information could
be traced from documents disclosed regarding performance of appointed
company on on–going projects in china. The letter from Ethiopian Embassy in
China didn‟t clearly mention the status on performance on on-going projects in
China. Another Chinese contractor was rejected as non-responsive as per the
same criteria in the same bid
 No information is provided whether the appointed firm had presented sufficient

evidence on his specific construction experience pursuant to compliance
requirement of bidding requirement.
The above issues are rightly identified by TAC during evaluation and their
recommendation was conditional for award.
4.2 Construction Supervision Contract – ICTE in JV with ICT& OMEGA
 The basis of contract was that the consultant would be paid as per the schedule of payments
in the contract which is mainly based on the tendered rate for each staff and the attendance
time of assignment. The consultant summits each month the attendance of his staff on site,
and evidence of reimbursable. To this end, the ERA‟s budget for the supervision contract
will remain fixed for the duration of contract and could only be changed by a limited
number of events.
 Up to end of June, 2010, the consultant was paid ETB 2,476,271.87 and EURO 78,908.27
thus the price is with in targeted budget and is as per the contract.
 The scope of services of the supervision contract includes reviewing the original design,
hence, the consultant has confirmed completion of design review tasks and the report was
submitted to ERA for review. The outcome could be on only disclosed after endorsement.
 The Engineer has issued a variation order amounting to ETB 5, 8829, 718.The variation was
issued as a result of instruction given from ERA to change Type “A “housing facilities and
Type “ A “vehicles to corresponding Type „ B”s. ERA has exercised it‟s authority without
prior consultation end users.

21
 The consultant has written various correspondences advising the contractor to fulfil
contractual obligations, speedup progress, urging to provide additional machineries, urging
to provide facilities for the use of engineer‟s representative and advice to assign of qualified
and experienced superintendence for works and site management. Many of the issue
addressed in the correspondents are minimum qualification requirement for any contractor
to be selected.
4.3 Works Contract - Jiangxi Zhogmei Engineering Corporation co.ltd

 During the progress of the works, a compensation event (events which could change the
target price) arose from variation order No 1 with regards to changes in the specification of
facilities provided to the Engineer
 ETB 5,829,718.00 is a saving from the target contract price due to changes made in
specification of vehicles and house to be provided to the Engineer
 A total amount of ETB 8,853,642.06 was certified to the contractor for price adjustment up
to June 30, 2010 (IPC 09) for the changes in price of materials specified and as per the
formulae in the contract. The cumulative amount certified amount is ETB 140,012,797.60.
Payment is made in proportion of 50% in local & 50% in EURO currencies at exchange rate
of 1EURO=14.82ETB. Advance payment certified ETB 57,562,467,96, EURO 3,884,107.17
 On June 30, 2010, 679 calendar days (54% of contract time) has elapsed with a delay of
9.06% from schedule. Substantial workload of major permanent works yet remained to be
executed within the remaining contract period It is not entirely impossible to catch up
progress and complete within the contract time but requires to get organized for accelerating
in all fronts.
 The contractor provided regular programme updates throughout the project. Detailed
programmes for the entire project were revised several times as per instructions from the
Engineer‟s representative in order to monitor the progress of the works and to assess the
impact of any changes as they arose and yet clause 14 programme is not approved

22
Appendix 1 – Material Project Information
Specification  Construction of the road 90.6kms with asphalt
concrete surfacing as per ERA, Geometric
standard 2002
 Road width 7mts carriage way and 1.5 mts
shoulder in rural areas and 19mts wide in town
sections
Project purpose  Short cut access b/n Tigray region and
Project identification eastern part of Afar region
 Facilitates domestic market for salt and other
material resources
Location Starts at the Hawusewa on the junction with the main
road Mekelle-Quiha and ends at Irebti
Intended Beneficiaries Not indicated
Feasibility study Conduct by Sheledia Inc (USA)
Document Not Disclosed
Budget Not in the documents
QS‟s estimate ETB 826,574,577.08
Tender procedure  Selected consultants are shortlisted and invited to

summit technical proposal & financial offer as
per RFP.
 Proposal is evaluated and responsiveness
identified for responsiveness as per RFP
 Financial is opened of those responsive
 Combined evaluation with weightings 80% for
technical scores & 20% for financial scores
 Bidder with highest score invited for contract
Tender process award negotiations
(project Design) Number expressing interest Not applicable
Number shortlisted 5
Number Submitting tender 3
List of tenderers 1.Construction Design Share company (CDSCo)in
engineers(CWCE
2. HEC-UNICONE-HAMDA JV
3.SABA Engineering plc
Technical evaluation report & Combined evaluation

Tender Evaluation report
report
 Advertisement for expression of interest floated
 Shortlist prepared and notified with RFP
Tender procedure  Technical and financial evaluations as per criteria
( 80% technical& 20% financial) bidder with
highest scorer invited for pre –Award
Tender process negotiations
(Project Supervision) Number expressing interest Not in the report
Number shortlisted 6
Number submitting tender 4

23
List of tenderers 1.Sheladia associates, inc USA in JV HITCON
Engineering plc
2. ICT (India) in JV with ICTE& OMEGA
Consulting Engineers plc
3.Roughton international in JV with BEZA consult
4. Engis Bceom Int. LTD in association with
Associated Engineering consultants
Tender evaluation report Revised Technical & Financial Evaluation reports
Tender procedure Open tender through public announcement
Post qualification evaluation and financial evaluation
to follow to identify least bidder
Number expressing interest 10
Number shortlisted Not applicable
Number submitting tender 5
Tender process (main List of tenderers 1. .Sinohydro corporation limited
contract for works) 2. China Gezhouba Group Company (CGGC)
3. Aydniz-KMC JV
4. Jiagxi Zhongmei Engineering construction
Co.Ltd
5. China Tiesiju Civil Engineering Group Co. Ltd
Tender evaluation report Post Qualification and financial evaluation reports

Name of main consultant HEC-UNICONE-DANA JV
Contract award Contract price NO separate design contract price fixed. The lot is
(project Design) designed as part of Afdera-ABALA (216kms)
Contract scope of work Set out in Contract Data and RFP
Contract programme Not in the documents separate for the lot
Name of main consultant ICTE in JV with ICT & Omega
Contract price ETB 11,309,330.50 and EURO 380,593.00 inclusive

of VAT
Contract scope of work  Role of the Engineer & Engineers
Contract award representative
(project supervision)  Design review
 Supervision of works as per specification
,drawings and terms & condition of contract
Contract programme  Contract signed march 20,20
 Contract duration-42 months
 Defect liability period-365 cal. days

Name of main contractor Jiangxi Zhongmei Engineering Construction Co.Ltd
(JXZM)
Contract price Original price-ETB 746,341,435.30 including 10%
contingency, provisional sums and 15% vat
Contract award (main
Revised price- ETB 740,511,717,30
contract for works)
Payable 50% is in ETB & 50% in EURO

24
Contract scope of work Construction of 90.6 kms road with asphalt concrete
surfacing as Set out in the specification , as per
drawings , conditions of contract and any
modification thereto:
Contract programme Commencement on 21 August,2008
Completion date- 20 February,2012
Duration 1260 calendar days
365 calendar days defect liability period
Changes to contract price, No compensation approved.
Contract Execution
programme, scope with
(project supervision)
reasons
Changes to contract price, documents not provided
Contract Execution programme, scope with
(project Design) reasons
Contract Execution Individual changes to the The contract price has reduced by ETB 5,829,718.00
(Main contract for contract which affect the in favor of the PE due to issuance of VO
works) price with reasons
Individual changes to the No time extension approved & granted
contract which affect the
programme, with reasons
VO‟s, claims, Early Two claim events was received but not finalized
Warnings & Compensation  Claim for 8 months extension of time and ETB
Events 15,000,000.00 compensation
 Claim for 8 months extension of time & ETB
20,000,000.00 compensation
 VO in reduction of project cost
Payment certificates 9 payment certificates issued at intervals
Details of any re-award of None
main contract
Post contract Actual contract price ETB 746,341,435.30 inc vat& provisional sums &
completion details contingencies payable 50% in Birr & 50% in EURO
(main contract for Total payments made Upto June 30,2010 ETB140,012,797.60 certified
works) Actual contract scope of No change in scopes
work
Actual contract programme No change in contract time
Project evaluation report It was indicated in the annual report, June 2010 that
on going the project has a slippage of 15.80% with respect to
contract time and 9.06% against schedule.
Documents to be disclosed
Feasibility study Not Availed
Financing agreement Not available
Tender evaluation report  Post qualification & financial evaluation reports
for works contract
 Technical and combined evaluation reports for
service contracts
Project evaluation reports (on completion and on- On going evaluation was part of the reporting
going) requirements of supervision consultant. No
independent status evaluation report availed to us

25
Table 1: Analysis of changes for contract time , price
Cha Effect Unit Amount and Scale Type of Effect Cause Apparent Comment - Detail or Justification
nge percentage (N,S. Categor Cause
Iden M,L) y
tifier
Completion Birr (5,829,718.00) N Reduction in Client- Change in Change in specification of facilities provid
Cost price related specification from Type “A” to Type “B”
Table 2: Analysis of changes on terms of contract
Ch Effect Type of Effect Cause Apparent Cause Comment - Detail or Justification

ang Category
e
Ide
ntif
ier
No change Uncompensated Contractor- Site management The contractor may catch-up with the progress
on contract delay related Equipment shortage
terms
Work not properly
organized
Source of information is annual report June 30,2010

26
Appendix 2. Document disclosure
I/N Description Date Received
1 Revised Technical Evaluation report s/18/08 / supervision/ 30,July 2010
2 Annual Progress Report, June ,2010 30,July 2010
3 Combined evaluation S/18/08/supervision 06,august 2010
4 Post qualification Ref w/04/08/works/ 06,august 2010
5 Financial evaluation Ref w/04/08/ works/ 06,august 2010
6 Technical evaluation S/26/ICB/6/ICB/GE/2001 06,august 2010
7 Combined evaluation report S/26/ICB/6/ICB/GE/2001 06,august 2010
8 Contract agreement for works 11,August,2010
9 Contract agreement for supervision service 11,August,2010
10 Payment certificate No 13 11August 2010
11 Payment certificate No 9 /works 11august,2010
12 Technical Evaluation report /Design 15 august 2010
13 Combined evaluation Design/ 15 august 2010

27

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CONSTRUCTION SECTOR TRANSPARENCY

INITIATIVE (CoST)- ETHIOPIA

REPORT ON INFORMATION PROVIDED

ETHIOPIAN ROADS AUTHORITY

HAWUSEWA-ABALA-IREBTI ROAD PROJECT

FINAL REPORT (COMBINED)

Table 1. Analysis of changes for contract time, price

Table 2. Analysis of changes for contract terms

Appendix II- Schedule of documents disclosed

Pilot Project Team Member Team Leader

1.1 APPOINTMENT OF CONSULTANTS

Pilot Project Team Member Team Leader

No evidence could be traced in the documents disclosed to us weather the appointed

1.2. CONTRACT IMPLEMENTATION PHASE

Pilot Project Team Member Team Leader

Pilot Project Team Member Team Leader

The Construction Sector Transparency Initiative (CoST) is an international multi- stakeholder

This pilot is led by the CoST-ETHIOPIA Multi-Stakeholder Group, which comprises

Pilot Project Team Member Team Leader

 To learn lessons to inform the design of CoST internationally

 An enhanced understanding of construction project costs amongst public sector clients,

 To learn and share lessons on publicly-funded construction project governance

 Collect the project information

 Verify the accuracy and completeness of the information

2.3 Data Collection & Verification Process

 CoST- Ethiopia has signed memorandum of understanding outlining schedule of project

Pilot Project Team Member Team Leader

 The information provided was reviewed to obtain understanding of the project

 Documents relating to project monitoring and contract administration i.e. recent

 Documents dealing with project feasibility , bidding documents of successful

Pilot Project Team Member Team Leader

3. Verification on Material Project Information

3.1 Procedures for Appointment of Design & Supervision Consultants

Pilot Project Team Member Team Leader

 Documents presented are complete to understand the process

3.2 Project identification and budget

Pilot Project Team Member Team Leader

3.3 Appointment of Design Consultant

I/N Companies invited Country,

Pilot Project Team Member Team Leader

 Phase I. Detailed Engineering Design & Tender Document preparation

I/N Firm name Technical scores,%

 Following endorsement and subsequent approval by GM of ERA, a notice was addressed

Pilot Project Team Member Team Leader

I/N Firm name Technical,80 Financial,20 Combined

Pilot Project Team Member Team Leader

Pilot Project Team Member Team Leader

Pilot Project Team Member Team Leader

3.3.5 Implementation stage

3.3.6 Temporary Assignment of Transport Construction Design Share Company (TCDSCo)

10 Sinohydro Corporation Limited China Collected& submitted

3.4.2.2 Award of contract

Pilot Project Team Member Team Leader

Pilot Project Team Member Team Leader

4.1 Approach to awarding contracts

Pilot Project Team Member Team Leader

 As per the qualification requirement of bidding document, bidders are required to

 No information is provided whether the appointed firm had presented sufficient

4.2 Construction Supervision Contract – ICTE in JV with ICT& OMEGA

Pilot Project Team Member Team Leader

4.3 Works Contract - Jiangxi Zhogmei Engineering Corporation co.ltd

Pilot Project Team Member Team Leader

Tender procedure  Selected consultants are shortlisted and invited to