Eight firms win Bulog's rice tender

JAKARTA (JP): Eight companies have been awarded contracts by the State Logistics Agency (Bulog) to import a total of 526,000 tons of rice between now and December, the government announced on Friday.

The agency has agreed to buy the rice from one local company and seven foreign companies at prices ranging between US$267.25 and $278.80 per metric ton for free on board (fob) delivery and between $283 and $293.60 per ton for cost and freight (c&f).

Contracts to import 600,000 tons of rice had initially been put out to tender, but the agency was unable to secure the full amount because of poor terms offered by the bidding companies.

Bulog official Mohamad Ismet said the agency would open up a tendering process for contracts to import the remaining 74,000 tons of rice next week.

Companies able to deliver the rice in October would be given preference, Ismet added.

"All companies, including those just awarded contracts and those disqualified on technical grounds, can submit tenders again next week," said Ismet, who is the head of Bulog's foreign procurement department.

Prices submitted in bids next week must not exceed the price range offered by companies awarded contracts on Friday, he said, adding that the government would consider purchasing more than 74,000 tons if the price was right.

The eight companies contracted to import the rice are Cargill Inc. of China, Siam Rice Trading and Soon Hua Seng of Thailand, Orco International and Petronas (Malaysian Trading) of Malaysia, Kin Sun Co of Hong Kong, Ascot Commodities of the Netherlands and PT Stelkon of Indonesia.

Local firm PT Dharma Jagat Raharja was the only company still in the running on Friday morning that was not awarded a contract.

The selection process started last Monday, when tenders submitted by 50 companies were scrutinized by a Bulog team. All tenders had to include a number of documents, including bank references and letters from the relevant embassies in the case of foreign firms.

A final decision was delayed until Friday, one day later than was initially planned, because Bulog's preference price was well below the prices quoted by tendering companies, which ranged between $274.25 and $310.25 per ton.

Minister of Industry and Trade Rahardi Ramelan, who is Bulog's acting chairman, rebuffed criticism of the slow and complicated way in which the tender was conducted.

"Just let me negotiate in a smart way," he told reporters at his office on Friday.

Thailand's Siam Rice Trading won the largest import contract. In December it will ship 110,000 tons of rice from Thailand at $290.50 per ton.

Orco International was awarded a contract to deliver six shipments of rice from China, Myanmar and Vietnam totaling 98,000 tons between now and December.

Petronas will deliver two shipments of rice from China totaling 100,000 tons in November and December. The shipments will be charged at $283.80 (c&f) and $289.50 (c&f) per ton respectively.

Soon Hua Seng will deliver 60,000 tons, Cargill 38,000 tons, Ascot 60,000 tons, Kin Sun 30,000 tons and Stelcon 30,000 tons.

The government initially planned to import 3.6 million tons of rice in the 1998/1999 financial year, although it later revised this amount to 4.1 million tons.

It has signed contracts with foreign governments to import 2.4 million tons of rice, some of which has already been delivered, and has said that a further 1.2 million tons will be purchased through a competitive international bidding process, including the 600,000 tons put out to tender earlier this week.

Meanwhile, the government announced on Friday that it would start distributing rice at the subsidized price of Rp 1,000 (9 U.S. cents) to a further 17 million poor families across the country on Oct. 1. The program currently embraces 7.3 million poor families. (das/gis)