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Fertilizer crisis: Midagri cancels purchase of urea due to irregularities

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After the Comptroller General of the Republic reported serious deficiencies in the acquisition process of 73,000 tons of urea, which was in charge of the Agro Rural entity, the owner of the Ministry of Agrarian Development and Irrigation (Midagri), Andrés Alencastre, announced that the observations of the controlling agency will be taken into account and that the purchase will be annulled and another call will be made.

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The evaluation committee of Rural Agriculture approved the offer presented by the Brazilian company MF Fertilizadores, despite the fact that it was higher in value than the one proposed by the US company Global Investments Group (GIG). The former was quoted at US$760 per ton, while the latter at US$650 per ton.

The Brazilian offer represented a payment of US$55,882,040 for the urea, while for the North American US$47,793,850, this is US$8 million less.

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To disqualify GIG’s offer, the evaluation committee questioned that this company presented ISO certificates in English, but accepted documentation in Portuguese from the Brazilian company MF Fertilizadores, the Comptroller detected, which suggests that there was favoritism.

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“For me, the main thing is transparency and that the technical characteristics of the call (of the tender) be respected,” Minister Alencastre explained: “We saw that the price, the technical quality, and the delivery time (of fertilizers). And those three things were not being fulfilled.”

Minister Alencastre reported that the Comptroller’s observations will be followed. Photo: Andean

Indeed, as pointed out by the Comptroller, the Brazilian company was going to deliver the urea in two parts and over a long period of time, while the provider GIG would supply the product in a single block and in a shorter time. But the evaluation committee preferred the Brazilian offer.

“We are going to declare null (the purchase process). And we are going to recognize the importance of what the Comptroller has said, we will take measures to annul the call, put aside those responsible (for the irregularities) until the end of the investigation with all the rigor that we are going to give it, and we are going to call another tender”, Minister Andrés Alencastre said last night at RRP.

An observation of the Comptroller is that the winning company, MF Fertilizers, did not include the minimum percentage of granulometry of the product, a mandatory data required in the technical specifications of the contest, which, if not fulfilled, would put the quality of the product at risk.

Agricultural campaign has been at risk of reducing production due to lack of fertilizers. Photo: Marco Cotrina/ The Republic

From this statement it follows that the evaluation committee accommodated the entire process so that the Brazilian MF Fertilizers obtained the good pro, with a price US$8 million more expensive than its competitor and failing to meet the technical requirements.

Therefore, the Comptroller warned that there is a risk that the urea will not arrive in time for this year’s agricultural campaign, the main reason for the acquisition of the product.

In addition, Minister Alencastre reported that MF Fertilizers had problems obtaining a letter of guarantee, a fundamental instrument to guarantee the fulfillment of the contract.

“Once the problem of determining the responsibility of the technical director of Rural Agriculture for the entire process, then we will open a new call in the most imminent period (…), so that in 30 days we will have the fertilizers at the ports of Salaverry, Matarani and Callao”, said Alencastre.

The data

The committee. It is chaired by Leónidas Oscco Sihui and integrated by Juan Guerrero Ochoa, Daniel Moscoso Vargas, Catherine Navarro Acosta and Carlos Ortiz Lluquín.

O’clock. The five gave him 100 points to a Brazilian company when it did not meet the requirements.

Source: Larepublica

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