Published On  Dec 04,  2011






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EPE Awards $29.5m Coal Supply Contract to Phillipas

Phillipas wins yet another big contract from petroleum enterprise to supply govít



The government's plan to use coal as a fuel for cement factories is about to be realized with the Ethiopian Petroleum Enterprise (EPE) awarding a 29.5 million dollars contract to Huyton Inc Company. It is represented by P.G. Phillipas, an England business man who has won the supply of various procurements made by the government over the past three years.

The contract is to be signed this week.

Only three companies had responded to an invitation extended to 61 companies to supply coal. Along with the winner, HMS Bergbau, a German international coal trading company established in 1995 with four million euro, and Wibyan, an Indonesian Company, had responded to the invitation.

Wibyn was disqualified for not providing a bid bond. The remaining two had passed to the technical evaluation. However, it was the company represented by Phillipas that offered the least price of 45.35 dollars for a tonne while HMS offered 51.85 dollars. Phillipas is not new to supplying huge amounts of goods to the government. He had recently supplied 300,000tn of wheat.

The EPE is to conclude a one year contract with Huyton for the importation of a minimum of 650,000tn of coal a month which is expected to arrive next month. This will see the government getting closer to replacing heavy furnace oil, which costs a lot in foreign currency. To see this through, the governemtn had set up a task force comprised of representatives from EPE, Maritime & Transit Services Enterprise (MTSE), Ministry of Industry (MoI) and five cement companies.

With plans to have cement factories use coal in three months time, the team was scrambling to accomplish their specific tasks as of July 2011.

The EPE was first tasked with finding pet coke supplier which had proven unsuccessful. It had turned to coal which is regarded as the second best alternative source of energy next to pet coke.

The EMTSE, which was tasked with preparing transportation and port facilities for the unloading of the coal hand is to sign a contract with the Djibouti port this week, according to an official from the MoI.

The two countries had agreed on the general terms of the import one month ago when Yigzaw Mekonnen, director of general of EPE, and Mekonnen Abera, head of EMTSE, were in Djibouti. The agreement is to be based on the terms of the deal discussed with Aboubaker Omar Hadi, chairman of the port.     

This is welcomed by cement factories some of whom were importing coal on their own. They anticipate prices to be lower than what they used to pay.

Although there is no telling what the price will be during distribution, the government has more bargaining power than individual companies, according to one marketing manager of a cement factory.

While the government was looking for suppliers, Messebo Cement and National Cement factories had teamed up to import coal at a reduced cost. They had imported 41,000tn in July.

From now on, cement factories are not allowed to import coal as the EPE ordered the imports based on the reported demand of cement factories.

With the exception of East and Mugar factories, which do not have the necessary facilities to use coal, the demand of the 18 factories currently operational and those that will enter the market was set at 896,500tn. Out of this, the highest amount, 22,000tn is consumed by Messobo and Derba Midroc, which will become operational in a monthís time, each.


By MAHLET Mesfin
Fortune Staff Writer


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