2. Content
• Introduction
• Millstone dates
• Scope of the project
• Method
• Contract agreement document gaps
• Management gap
• The way forwarded
3. Introduction
• The Potato value addition project ideas was initiated by staff of Chemical and
Food Engineering faculty (Eneyew Taddese, Ph.D.) for the establishment and
upgrading of Food Technology/Engineering program at BDU-BiT.
• Flour is used for different application in enchaining nutritional value the food
in using as input during preparation of various foods.
• For injera and bread application with up to 25 % substitution of wheat flour.
4. Introduction- capacity
• In the initial proposal, it was planned to produce 1,000 quintal of potato flour
per day and 62,500 quintals of potato flour in a year.
• This requires 250,000 quintals of raw potato, which will be purchased from
the Mecha woreda potato producing smallholder farmers.
• It will create job opportunities for 17 persons on permanent basis 30
temporary employees in its project realization phase.
5. Introduction-Millstone date
• Proposal prepared by – 2007 E.C. or 2015 G.C. (100 tone day)
• Agreement date With supplier , 24, 09, 2010 E.C.(5 tone /day)
• Expected delivery date – with in three month
• Actual delivery date- 2013 (Delayed more than 3 years)
6. Introduction – main target customers
• Bahir Dar University injera supplying enterprises supplying more than
40,000 ‘injera’ per day.
• The market can be easily expanded in the nearby Universities (Debre
Markos University, Injbara University, Debre Tabor University, Gonder
University, Wollo University, etc.
7. Introduction- Budget ( Financial Information)
• The total cost of the project is Birr 90,760,980 out of this, 7,404,900 Birr is
for investment and 81,703,560 Birr is as working capital.
• The project profit and loss statement indicates that the project would be
profitable for all its project life.
• The project estimated annual gross profit is 6,672,980 Birr and it is
profitable and worth implementing it.
8. Introduction- Budget ( Financial Information)- Agro
big
• The total cost of the project is Birr 90,760,980 out of this, 7,404,900 Birr is
for investment and 81,703,560 Birr is as working capital.
• The project profit and loss statement indicates that the project would be
profitable for all its project life.
• The project estimated annual gross profit is 6,672,980 Birr and it is
profitable and worth implementing it.
9. Introduction- Budget ( Financial Information)
• The bid was awarded to Banner Techno Trading (a local agent of the
suppliers based in AA).
• BiT BDU (B/Dar) has made an agreement with the Banner Techno Trading
(AA) to procure the plant at 17,131,000 Birr.
• The equipment was delivered after taking more 3 years. BiT made 30 %
advance payment for the supplier which is birr 5,139,300.
10. Introduction- location
• Ideal location based on proposal - Mecha woreda(Merawi)
• Actual location -Bahir Dar is best location
• Due to easy availability of raw material, water availability and other factors
like easy access to roads, transportation cost and other infrastructure facilities
11. Scope of the project
• The buyer is fully responsible for all
• civil construction activists,
• transformer and electricity supply,
• indoor and outdoor lightning of the processing room,
• process water supply to the processing room,
• construct waste water treatment system if need,
• supply raw potato and chemicals for commissioning purpose,
• fulfilling laboratory equipment if needed,
• securing weighing balances for receiving of raw potato,
• securing spare parts and fulfilling operating and
12. Scope of the project
• The supplier agreed and signed contract agreement to supply and handover
to BDU 5.5-ton potato flour processing plant complete range as per data
list in the agreement document
• The supplier shall supply well organized technical and operational
documentations
13. Fact on the supplier side
• The supplier deliver almost all the major equipment's
• Accessories such as cable, nut, bolt not delivered
• Major cable for the boiler not delivered by the supplier
• We have not seen Manuals
14. Ob-Technical Gap
• The proposal was not Plant-based procurement rather it focuses in
equipment basis,
• Didn’t specify the type of potato (raw material)
• Product specification
• Construction material and grade of machinery
• Efficiency of each machine
• Workshop tool
15. Technical Gap
• Workshop tool
• Utilities requirement
• Transformer
• Waste water treatment system
• Water quality
• Control system of the plant (process control, motors, steam boiler, fans, display status
of machines, alarm, master controller, fault detection system and measurements like
power consumption, current, voltage, frequency, power factor)
• Supply chain structure and value chain structure
• Material handling and By product handling system
• Storage system
16. • The specification is not properly prepared as per the requirement of
po.flo production
17. Contract agreement document gaps
The contract agreement document signed by the two parties’ failure to clearly consider the
following points
• responsible was not clear for Installation, commissioning and training of the delivered
equipment
• The packing and leveling of machinery
• Providing of manual, software and it languages requirement
• Clear responsibility of both parties
• Conditions of Delivery is not indicated
• In caseDelays in Completion Date
18. Contract agreement document gaps
The contract agreement document signed by the two parties’ failure to clearly consider the
following points
• Quality Control, Inspection & Testing
• Installation and Preliminary Test during Start-Up and commissioning conditions not
mentioned
• Final Acceptance-conditions not mentioned
• Rejection Due to Defects
• changes in the works
• Painting and Protective Coating
19. Management gap
• To realize this project BiT BDU fail to plan and perform the below mentioned activates
• In setting clear project implementation deadlines on execution of the project activity.
• Getting of factory land and fulfilling the required facility to install the machinery.
• considered some equipment/ tools as be part of scope supply of the project such as
transformer, weighing balances for receiving and waste water treatment systems
20. Management gap
• To settle remaining payment for the supplier
• To reach an agreement on the delivered and remaining equipment list
• Preparing good storing shelter (room/place) on temporary basis to keep the machinery in
good condition
21. The way forwarded
• Prepare temporary shelter for the equipment e.g. better to shift or
transfer those equipment's to civil lab
• Finalizing issue related to land, power (1 and half year ) , water 1 year
• Update feasibility study
• Assign appropriate person to follow-up the related issues
• Prewashed potato to reduce fledge
