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The ToR were changed, after initial bids from the final two companies were beyond the company’s financial capacity
Eth-Switch SC, a consortium of Ethiopian banks, has selected a vendor, Swiss-based BPC Banking Technologies to implement its Electronic Transfer System to make inter-bank processing easier.
BPC was awarded the winning bid on Tuesday, March 25, 2014 for an undisclosed sum after a two-year bid process. This was despite one of its competitors having previously been close to signing.
When Eth-Switch announced a tender, the final bidders, BPC and Compass Plus, came forward with offers of 17 million and 11 million dollars, respectively. Both of these were too high for the Company, whose budget for the project was only 80 million Br. Their financial offers were opened on May 7, 2013.
Eth-Switch SC was formed in 2011 by all Ethiopia’s 16 banks, according to a June 2009 recommendation by the Central Bank. The switch system it is trying to establish will enable the banks to transfer funds electronically, clear cheques between themselves and share each other’s Automated Teller Machines (ATMs) and Point of Sale (PoS).
Fourteen IT vendors responded to the initial tender floated in February 2012. After months of technical evaluation, the company cut the competitors down to just four: S2M, M2M, BPC and Compass Plus. This was eventually narrowed down even further to just BPC and Compass Plus.
The bidding process, which took two years, finally ended with BPC Banking Technologies being awarded the contract for the supply and implementation of a National Electronic Funds Transfer (EFT) Switch Clearing, Settlement and Reconciliation System.
The higher than expected offers from the two companies led Eth-Switch to revise its Terms of Reference(ToR), dropping the turnkey project elements such as – the data centre, transfer of knowledge and hands-on training – to focus instead on the switch system alone. This reduced its cost by as much as 80pc, according to sources close to the project. But, in the process, it also chose to deal with Compass Plus alone.
BPC had requested to revise its offer in line with the revised ToR, but was told that doing so would violate the terms and conditions of the bid document.
The Company’s decision was, however, disputed by some members of the bidding committee and bidders who had been involved in the process. Compass Plus’s offer, they claimed, had hidden costs that would push up the price of the project beyond the second bidder, BPC.
The hidden costs included additional payment for the ATM machines; additional cards, such as Point of Sale (PoS) and ATM (Visa) cards and license renewal payments.
Eight weeks ago Eth-Switch, decided to cease dealing with Compass Plus, without publicly giving its reasons for the decision. Nevertheless, its negotiations with BPC Banking Technologies came to a successful conclusion with the signing of the contract at the Sheraton Addis Hotel, by Bizuneh Bekele, CEO of Eth-Switch S.C, and Vasily Grigoriev, CEO of BPC Banking Technologies.
BPC is expected to deliver the project within a year of customising its software (smart vista) to Ethiopia’s situation, Bizuneh said, adding that his company had received a 37pc discount.
BPC Banking Technologies was established in 1995 and has 15 offices in different countries. Its head office is located in Zug, Switzerland. The Company has previously installed a switch system for Malawi and Tunisia in Africa, said Daryl Berg, managing director of BPC Africa.
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