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Ethiopia: Is ECX at it again? ECX's upcoming procurement bid

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11/29/12

  07:50:48 pm, by admin, 1266 words  
Categories: Ethiopia

Ethiopia: Is ECX at it again? ECX's upcoming procurement bid

Ethiopia: Is ECX at it again?

ECX's upcoming procurement bid

By Wondwossen Mezlekia

The Ethiopia Commodity Exchange (ECX) is currently conducting a high-ticket international procurement - the first of its kind since a multi-million dollar bid was busted in 2010 due to alleged fraud and corruption during the bidding process.

The bid for the supply, installation, and maintenance of a futures trading software that ECX floated back in 2010 was marred by dishonest maneuvering, seemingly to favor the Sri Lanka based company, Millennium IT, and World Bank withdrew ECX's award proposal and cancelled the loan. The loan was part of what the government had borrowed from International Development Association (IDA) for the purposes of financing the Rural Capacity Building project. [1] Strangely, the said futures trading software was not needed to begin with and would have been running idle today had ECX purchased it in 2010, because the government is, as it has always been, decidedly against price speculations and hence would not allow Forwards and Futures trade operations that the software was supposed to support.

ECX is once again preparing to spend some of the money that the government has borrowed from the Investment Climate Facilities for Africa Trust (ICF) and other donors on an online trading platform at an estimated total cost of more than $10 million (exact amount and details are withheld). Arguably, much like the futures trading software, the merit of this investment is also questionable, especially in light of ECX’s and the government’s current priorities, the details of which is for another article. The purpose of this article is to equip concerned citizens with the information and resources they need to be on their guard against corruption, and to put on notice anyone who may be under temptation or illusion to fraudulently benefit from the upcoming bid. Although there is no evidence so far, it is better to prevent corruption than to prosecute it.

According to ECX's budget proposal that was reviewed for this article, almost 76% of the budget for the online trading project will be covered by funds from the World Bank's Rural Capacity Building Project. ICF has agreed to cover the financing gap of about 24% of the total estimated budget through a grant. The procurement is being conducted under the auspices of the outgoing officers, Dr. Eleni Gebre-Medhin, Solomon Edossa, and Ahadu Woubshet who only have an advisory role under a one-year contract, even though the new CEO, Anteneh Assefa and other officers have already assumed their positions.

The Invitation for Bid (IFD) for the procurement of a core system for online trading, including its risk management, surveillance, and clearing components (Procurement Reference Number ECX-ICF/G/002/2012) was advertised on November 1, 2012 on national papers and online, including on dgMarket. [2] Accordingly, the bid will be opened in two phases: the technical bid will be opened on November 30, 2012 at 10:30 am local time at ECX Media Room, and the opening date for the financial bid will be announced thereafter.[3] The bidding will be conducted in accordance with the open International Tendering Procedures contained in the public procurement guidelines of the Government of Ethiopia, the ICF Guidelines[4], and the International Competitive Bidding (ICB) procedures.

The past record of the government in detecting or prosecuting suspected fraud and corruption is dismal. On the other hand, donor's guidelines have proved to be reliable sources of defense in past disputes involving international procurement bids. Among these, ICF's guidelines appear to be by far clearer and strictly dictating how the borrower and bidders alike should behave during the bidding process. For example, ICF not only offers to provide assistance of audit services and monitoring (Article 1.6), but also explicitly states the steps that it takes to fight fraud and corruption (Article 1.7).

Review, Assistance, and Monitoring

1.6 ICF and auditors appointed by ICF shall review the Grant Recipient’s selection process for the selection of suppliers proposed by the Grant Recipient in the Procurement Plan to ensure compliance with the Grant Agreement and these Guidelines. The Grant Recipient shall retain all documentation with respect to each contract during project implementation and up to two [y]ears after the closing date of the Grant Agreement. This documentation would include, but not be limited to, the signed original of the contract, the analysis of the respective proposals, and recommendations for award the record of justification, the capabilities and experience of the suppliers, for examination by ICF, auditors appointed by ICF or by its suppliers.

Fraud and Corruption

1.7 It is ICF’s policy to require that Grant Recipients, as well as suppliers and their subcontractors under ICF-financed contracts, observe the highest standard of ethics during the selection and execution of such contracts. In pursuance of this policy, ICF will reject a proposal for award, cancel the portion of the Grant allocated to a contract; sanction a supplier if it at any time determines that the tender process was marred by corrupt, fraudulent, collusive, coercive, or obstructive practices. In addition, ICF will have the right to require that, in contracts financed by an ICF grant. a provision is included requiring suppliers to permit ICF to inspect their accounts and records and other documents relating to the submission of proposals and contract performance and to have them audited

Articles 2.1, 2.15, and 2.21 of ICF's guidelines also require borrowers to conduct bidding by following a two-tiered approach and based on Quality and Cost Based Selection (QCBS), which uses a competitive process that takes into account the quality and the cost of the services in the selection of the winner. The guidelines prohibit evaluators of technical proposals from having access to the financial proposals until the technical evaluation is concluded.

The Selection Process

2.1 QCBS uses a competitive process among short-listed firms that takes into account the quality and the cost of the goods and supplies in the selection of the successful supplier. Cost as a factor of selection shall be used judiciously. The relative weight to be given to the quality and cost shall he determined for each case depending on the nature of the assignment.

Evaluation of Proposals: Consideration of Quality and Cost

2.15 The evaluation of the proposals shall be carried out in two stages: first the quality, and then the cost. Evaluators of technical proposals shall not have access to the financial proposals until the technical evaluation is concluded. Financial proposals shall be opened only thereafter. The evaluation shall be carried out in full conformity with the provisions of the RFP.

Articles 2.11 and 2.12 if IFC's guidelines even go as far as to dictating the minimum time that grant recipients need to allow between the different stages of the procurement process. For example, the minimum time-limit for receipt of proposals should not be less than 40 days from the date of the advertisement, except in emergency situations.

While these and other Articles of ICF's guidelines appear to provide reasonable controls around each segment of the procurement processes, any control is only as strong as the people applying them. It is thus imperative that concerned citizens and bidders get engaged and attentively monitor all international bidding processes conducted at ECX and other institutions in order to prevent misappropriations of foreign aid in Ethiopia.

Report suspected fraud and corruption to Investment Climate Facility for Africa at info@icfafrica.org or projects@icfafrica.org; the World Bank Group's Integrity Vice Presidency at investigations_hotline@worldbank.org; or Transparency International at transparency@transparency-usa.org.
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[1] http://poorfarmer.blogspot.com/2012/03/is-government-serious-about-fighting_19.html
[2] http://www.dgmarket.com/tenders/np-notice.do~8547811 (dgMarket is an international portal for tenders and procurement opportunities from governments and international organizations)
[3] The time elapsed between the date of advertisement and the bid opening date appears to be shorter than the minimum time limit set under Articles 2.11 and 2.12 of ICF's Procurement Guidelines
[4] http://www.icfafrica.org/documents/ICF-Procurement-Guidelines-for-Goods--Suppliers.pdf
---

Read more about ECX at http://poorfarmer.blogspot.com/p/ecx-watch.html
Contact the writer at poorfarmer@gmail.com

16 comments

Comment from: Ash [Visitor]
Ash

@ Wondwossen Mezlekia

What is Ethiopia choice

1. Closed down ECX because of corruption
2. Appoint opp. Party leaders they will be free of corruption
3. America is corruption free so buy from America not India company.
4. Since the quality of software made by an Africa or Indian much inferior to America ban the Africa from biding.
5. World bank were looking out for our interest when they stop us buying the software two years ago.
6. Since Ethiopia doesn’t use future marketing then what the point of buying the software even for free. Because it is useless to us so why biding on it.
7. I mr Wondwossen Mezlekia contributed much by exposing corruption then actually doing a real tangible change in Ethiopia.

Not related question if ECX trading one billion dollars worth of business it wouldn’t better off paying corruption and get the system going. Now because of want to play by the rule we wasted two years.

U r economist u know how business work u might call it corruption but other might call it commission the sale person from Ethiopia side make it happened and he or she must deserve commission for hard work they put in… Yes the Ethiopian government might pay them under market value… If u want to follow the rule of business then Ethiopia government must follow business practice and pay up their worker for doing a great job. Late me ask u how much would u pay for someone to setup ECX I can go on on but it is very useless.

I don’t think u business in Ethiopia if u do late me ask u very simple question late say u have billion dollar investment and u ask Ethiopian government to give u free land… The think is they agree to give a free land but they told u it will take two years.. Are u going to buy a land which cost only 250,000 dollars and get ur business going.. If u waited two years to get free land u are losing it because when u buy material to build your office the cost doubled within this two year whatever gain u might get u lose it on inflation beside u could have make money running ur company.

11/29/12 @ 22:57
Comment from: TEDDY [Visitor]
TEDDY

The usual Agazi Bandits ,Looting Mafia System .They creat fake Institutions by finally closing them
after emptying the cashier .

11/29/12 @ 23:59
Comment from: gemeda [Visitor]
gemeda

ECX is a very corrupted organ and institution in ethiopia , ECX earns profit more than well built institutions like banks and airlines industry .

Ethiopia people has to select its food type to avoid ECX based commodities to avoid price inflation and unnecessary costs

1) Ethiopia people has to eat onion , potato , tomato , fruit , bread , super market foods and the like to avoid ECX billion profit of the poor ethiopian farmer .

2) ECX is an institution that form a corruption institution of farmers , brokers , and poorly educated economists.

3) the ultimate goal of ECX is the farmer of Ethiopia to join corruption business .

4) ECX corruption on the past 10 yrs is almost in billion birr .

5) Ethiopians will face a great financial and economic crises if ECX is continue its work .

11/30/12 @ 00:16
Comment from: gemeda [Visitor]
gemeda

1) ECX 2010 bid was marred by dishonest maneuvering . what is the government is doing because ethiopia government is not taking a political decision on this members and participants .

2) favor of sir lank company ? what is the Ethiopian rule and regulation says on favor of bid , is this corruption or fraud , or what is it ?

3)2012 softwar is running idel today had ECX it in 2010 , why ECX is purchsed idel software ? who was and is in procurement office ?

4) why they want to spent 10 million dollar again ? is it another corruption or can we customize the ideal software , there are so many solutions before bidding the software ? does Ethiopians lose money by IT without knowing the IT economy , Ethiopians are loosing major discipline of law , politics , procurement because they want only IT .

5) avoiding corruption is a good step for Ethiopia .

11/30/12 @ 00:43
Comment from: Solomon [Visitor]
Solomon

Mr. Wondwossen,

I am really lost. What is your exact point? Are you trying to lecture us on World Bank procurement guidelines? Stop your “cut and paste” the WB rules and try to make your point simple and clear.

After reading your article, I found nothing that suggests there is corruption in the otherwise most innovative and most successful ECX. ECX is one of the greatest achievements in the fledgling Ethiopian economy thanks to the gallant daughter of Ethiopia Dr. Elen Gebremedhen, her dedicated diaspora team and the vision, leadership, and steady support the team received from the greatest ever leader Meles Zenawi.

If you can not be happy with this success story for whatever reason, the least you can do is stop creating bogus corruption story and defame the hard working Ethiopians.

There is ONLY one and one way to take Ethiopia forward. To stop talking bullshit 24/7 and actually do something useful like what Dr. Elen and her dedicated team of diaspora Ethiopians did. Talk is rubbish. If Ethiopia was to advance with rubbish talk, the likes of Birhanu Nega, Elias Kifle, Tamagn Beyene, Al Mariam, Mesay K, etc… would have done wonders in the last over 20 years. Do not join these useless group of talkatives…you should be part of the Ethiopian hard working team that is trying to put Ethiopia in its right place.

Next time do not “cut and paste” things and be to the point.

Yours sincerely,
Solomon

11/30/12 @ 00:59
Comment from: C'est moi senait [Visitor]
C'est moi senait

BURN IT DOWN TO GROUND. WE DO NOT NEED THESE GREEDY WEYANNE ROBBERY EXCHANGE.

THAT shabia troja hore is helping all Hoddams to loot poor farmers. Burn her too with gasoline Money in her mouth

11/30/12 @ 03:09
Comment from: prince of konso [Visitor]
prince of konso

wondesn
i read your article again and agian. it is neither informative nor gives any solution. if you think there is a problem please roll your sleeve and be part of the solution. we are tired of people like you who live and die by criticizing good and practical people. you have the easiest job in the world, sit down and find dirt in every aspect of human effort. what i really realised the only thing you know about this great organization is that you hate it.

11/30/12 @ 08:49
Comment from: maritu kebede mesay [Visitor]
maritu kebede mesay

C’est moi senait

Hi, please do no disappear. I miss you when you do. I miss your KEFTAF.

11/30/12 @ 10:24
Comment from: Ash [Visitor]
Ash

Thank prince of konso and Solomon

Expecting perefection from EXC like criticizing

henry ford on his model t ford

Or
Criticizing

Steve jobs on his first apple computer

It is demanding to invent iPhone in first shot

Ask me if EcX is corrupt or not after 100 years

Beside what is the solution give it to ginbot 7 because the are free of corruption.

I always wonder if EcX is corrupt then why not creat ECX 2 which is corruption FEE and show us.



11/30/12 @ 11:09
Comment from: my2cents [Visitor]
my2cents

The crux of the article is the third paragraph. The ghostly swindlers behind the first failed and exposed corruption and theft are once again at it trying to get a cut from the $10 million, the money the government borrowed for the software. Mr. Wondwessen is exposing not only ECX but the modus operandi of the entire woeyane enterprise. Mafia-like organized crime syndicate are all about constantly plundering the country. Like hyenas, they’ll come again and again to strip clean their prey.

11/30/12 @ 13:31
Comment from: selam [Visitor]
selam

C’est moi senait
its pathetic way to get attention educate your self.@

11/30/12 @ 18:34
Comment from: my2cents [Visitor]
my2cents

Checking out ECX’s current status at http://www.ecx.com.et/, the website intended to show transparency (things are not what they seem to be) one comes across a section of speech from the outgoing C.E.O, E. G/M:

The second day opened with three well-attended Parallel Sessions on key challenges: Transparency , Capacity, and Regulatory, with a wide range of perspectives and lively debate by the participants.

http://goo.gl/GnbkG
http://goo.gl/9Zo0G

12/01/12 @ 02:16
Comment from: Seattle [Visitor]
Seattle

Before critizing the writer, you need to read what happened in past procurements at ECX.

“The bid for the supply, installation, and maintenance of a futures trading software that ECX floated back in 2010 was marred by dishonest maneuvering, seemingly to favor the Sri Lanka based company, Millennium IT, and World Bank withdrew ECX’s award proposal and cancelled the loan.”

I don’t think he is against the procurment, but just giving us a heads up\be in a guard and warning ECX not repeat the same mistakes.

“The purpose of this article is to equip concerned citizens with the information and resources they need to be on their guard against corruption, and to put on notice anyone who may be under temptation or illusion to fraudulently benefit from the upcoming bid. Although there is no evidence so far, it is better to prevent corruption than to prosecute it.”

I wish we have insiders like him for the rest of super secret government run and quasi government\party run businesses.

12/01/12 @ 03:31
Comment from: Ash [Visitor]
Ash

Seattle,

U look like u hate corruption may is it a good idea to hire u because u look like an honest man..

U see my country man corruption is my friend in Mangustiu time because of corrupt official my life were saved.. I know for sure u will pay bribe to save ur life so corruption is saver so I will not abandoned when corruption is attacked left and right

I read some were corruption is like grease that reduce fraction between two metal… The same go with business corruption make the weel of business trun otherwise the will stop.

If u want reduce corruption then u have to pay ur worker much higher rate then u pay them now if ur worker or CEO runing one billion dollar or 20 billion birr company u can get away by paying them 500 dollar or 10,000 birr get with the program and start paying the real money and the will start working for real

By the way if u answer me u have to answer if u r corruption free and tell us u never pay corruption while u r in Ethiopia.

12/01/12 @ 06:27
Comment from: Seattle [Visitor]
Seattle

Ash,

From what I read so far, You are an apologists for everything happing in Ethiopia.
did I hear you saying corruption is good? just because you benefited from it in the past? That is so sad.

There is no 100% corruption free country in the world nor there is 100% free economy. That should not stop us from fighting to reduce the growth in the amount of corruption currently in progress. You can’t let it have a free ride on the society. that is why countries have anti-gaft and anti corruption rules and movements. Some succeeded in reducing the amount of corruption and some didn’t put a dent.

Corruption is not a grease between metals as you stated. It is a cancer. If it is not detected and removed early , It will consume the entire body.

12/03/12 @ 01:43
Comment from: Ash [Visitor]
Ash

Why r u wasting my time, did u didn’t pay bribe in Mangstiu time. Be it for u or for ur family? Or would u ever pay bribe to safe ur family from Mangustiu official.

First answer this question then we go step by step. I am not saying just because u give birbe before it doesn’t make it right Now. I get that point but when u talk about corruption u have tobe clear to u were u stand before and now…

12/03/12 @ 11:17

rebtel

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