Following the provisional re-awarding of the contract for the construction of the Mohamed Bin Zayed (MBZ) Center for Innovation and Entrepreneurship, press articles have circulated information questioning the procurement process. In the interest of transparency and accountability, the General Delegation for Rapid Entrepreneurship for Women and Youth (DER/FJ), the implementing body for this project, wishes to provide the following clarifications.

Historical

On February 6, 2020, the DER/FJ, through the State of Senegal, received a $20 million donation from the Khalifa Fund for Enterprise Development, as part of a grant agreement with the State of Senegal, for the construction of the Mohamed Bin Zayed (MBZ) Center for Innovation and Entrepreneurship. The building, located in Mermoz, comprises a landscaped terrace, seven stories (ground floor + 7 floors), a mezzanine, and two basement levels.

Following an emergency tender procedure, SERTEM Groupe was the sole bidder and awarded the contract for an amount of 17,240,961,046 CFA francs excluding taxes and customs duties for a period of execution of 18 months from the date of receipt of the service order to start.

In February 2022, following the opening of the special account at the BCEAO in Dakar, the Khalifa Fund made an initial disbursement of US$7.5 million, equivalent to 4,312,449,400 CFA francs, in accordance with the grant agreement. Therefore, reports of an initial disbursement of US$10 million are unfounded.

Regarding the postponement of the start of the work to March 7, 2022.

On January 14, 2022, a preliminary start-up service order was signed by both parties, which triggered the payment to SERTEM of a start-up advance of 3,448,192,209 FCFA, by transfer from the BCEAO on March 1, 2022. It is important to emphasize that the said advance bears the tax service exemption visa and reveals information indicating that the exemption was provided 21 months after the start-up service order.

Regarding the exemption of 8,324,806,047 CFA francs which was allegedly received only 21 months after the start-up service order, while the overall market is 17,240,961,046 CFA francs excluding tax.

The DER/FJ seized and obtained from the competent authorities a certificate of exemption in the amount of 8,324,806,047 CFA francs on August 2, 2021, well before the payment of the start-up advance, and multiple statements which clearly bear the exemption visa of the Directorate General of Taxes and Domains (DGID).

On July 19, 2022, after transmission to the Directorate General of Taxes and Domains (DGID) and the Directorate General of Customs (DGD) for approval of the exemption titles of SERTEM's subcontractors relating to the supply of equipment and materials, the DER/FJ was informed of the rejection of the request on the grounds that the exemption titles obtained by the DER/FJ concern exclusively SERTEM and not its subcontractors.

Furthermore, the Ministry of Finance and Budget, by letter dated June 28, 2023, recommended to the DER/FJ to "rigorously follow the level of exemptions granted taking into account those already validated by these services; knowing that the total amount exempted is correlated only to the donation part of the project" and not to the 17,240,961,046 CFA francs, and that "any overrun will result in a regularization by the tax and customs control services after the fact."

Regarding the architectural plans

The preliminary technical documents enabling the commencement of work were provided to SERTEM. In accordance with its contractual obligations, SERTEM was responsible for the internal control of the studies, in particular the verification of the conformity of the architectural plans.

Regarding the alleged unpaid debts mentioned by SERTEM Group

Due to delays experienced by SERTEM in the execution of work on the site, the project management assistance and project management contracts ended on September 7, 2023, as notified to the service providers.

Since these latter were essential in the validation process of the statements of account, the DER/FJ had no contractual basis to receive and settle the invoices.

It should be noted that SERTEM unilaterally halted work for 20 months, with the demobilization of its technical teams officially documented by a bailiff. This jeopardized access to the remaining donation funds, the timely completion of the project, and Senegal's international standing.

DER/FJ's decision to restart and complete the work as soon as possible

Following a mission by the state control bodies, two recommendations were made on this matter: the appointment of an external and independent real estate expert firm and the substitution of a company in accordance with the provisions of Article 137 of Decree No. 2022-2295 of December 28, 2022, concerning the Public Procurement Code, in order to allow the effective continuation of the project.

In accordance with these recommendations, DER/FJ contracted with a court-approved real estate expert for a counter-assessment of the actual progress of the construction project. The expert determined the progress level to be 19.5%.

To date, SERTEM has collected a total amount of 5,910,948,554 FCFA and has only completed the structures of the two basements and the ground floor.

Company substitution recommendation

Following the termination of the contract by order of the Minister of Finance and Budget after a favorable opinion from the Central Directorate of Public Procurement (DCMP) and in accordance with the provisions of article 74 of decree no. 2022-2295 of December 28, 2022 establishing the Public Procurement Code, a restricted tender procedure in emergency procedure was initiated.

This procedure allowed three (3) companies to compete, and following the process conducted by the DER/FJ Procurement Commission, the company whose offer was compliant and the lowest was selected. The evaluation results were submitted to the DCMP, which issued its No Objection Opinion, and in accordance with transparency rules, the provisional award notice was published in the daily newspaper Le Soleil.

A Senegalese company meeting all the technical and financial conditions was selected to take over the construction site for an amount of 17,300,065,043 FCFA including tax, whereas the amount of the initial contract of SERTEM Groupe was 25,565,767,093 FCFA including tax, taking into account the exemptions of 8,324,806,047 FCFA (tax charges and customs cordon).

Regarding legal recourse

The legal action brought by SERTEM Groupe is not suspensive. It does not suspend either the effects of the termination or the progress of the restarted procurement procedure.

Finally, the DER/FJ will use all legal and judicial means to preserve its image and thus protect the interests of the State of Senegal.

Progress report on the MBZ works carried out by SERTEM for a total amount received of 5,910,948,554 FCFA