A partnership between local and Chinese construction companies has won a deal to finish the headquarters building of Nile Insurance for 872 million Br.
Rama Construction and China Jiangsu International Economic & Technical Cooperation have won a bid to complete the finishing work on the 25-storey building.
The agreement was signed between Nigus Anteneh, CEO of Nile Insurance, and Firew Tedla, founder of Rama Construction, on December 7, 2018.
Valued at 1.2 billion Br, the building rests on 2,400Sqm and has three underground parking areas. The finishing work will be executed in two phases. The first phase will go from the ground floor until the fifth storey and is expected to be finalised in the next six months. The second phase is scheduled to furnish the remaining structure and is expected to be completed in two years.
Rama and Jiangsu International won the bid after competing with Yotek Construction. For the initial tender that was announced in July 2018, a total of 12 companies showed interest, but only two parties submitted financial and technical offers.
During the financial bidding, the partners gave the lowest offer of 872 million Br, while Yotek offered one billion Birr.
"Yet the deal is still open for price review," Nigus told Fortune. "As the engineering estimated is 600 million Br, we will review the investment in the course of construction."
Rama's executive agrees with Nile's CEO.
"Based on the market price of supplies, we might sit down again to talk about the payment," said Zelalem Tilahun, general manager of the contractor.
The finishing work includes the installation of air conditioning, aluminum work, floor finishing and partition work. Rama and Jiangsu will also install nine elevators, transformers and generators. The elevators are estimated to cost 33 million Br, while the generator and the transformers cost 22 million Br.
Located in the financial district along Ras Abebe Aregay Street, the construction of the building was started in 2015, with the foundation and structural work executed by Rama Construction for 240 million Br. Wesen Architects & Engineers supervised the structural work on a 92,000-Br-a-month contract.
Rama, which has previously worked on Jimma University Medical Hospital, a digital library of Addis Abeba University, the office complex of UNECA, Heineken's beer factory and ITACA Textile Factory, was supposed to deliver the project in two years but was delayed for nearly a year.
Design changes, the forex crunch and the supply of rebar were cited as causes for the delay, according to Nigus, CEO of Nile. The insurer was established in 1995 with a capital of 12.5 million Br. Currently, the company has a paid-up capital of 188 million Br.
To hire a construction consultant for the finishing work, Nile, which recently built a recovery yard at Gelan; an office in Bahir Dar for Abyssinia Bank; and acquired a building at Kality and Gurdshola, will float a tender in the coming weeks, according to Nigus.
An expert in the construction and engineering industry sees the partnership between a local and foreign company for such a large-scale project as commendable.
"The foreign companies have the advantage of getting foreign currency and construction supplies easily," says Abebe Dinku (Prof.), a civil engineer and university lecturer with over three decades of experience. "Yet with the support of the government and the consultant, local contractors can deliver projects on time and efficiently."
"The link also helps Rama in gaining experience and improves its profit margin," Abebe told Fortune.
Out of all five company headquarters that are under construction in the financial district, only Nile has awarded a project to a local contractor.
China Jiangsu, which since 2015 has been building the head office of United Bank at a cost of 1.5 billion Br, has previously partnered with Rama for the construction of Jimma Teaching Hospital. China Jiangsu also constructed Hope University and Derba MIDROC Cement Factory.
