Mozambique drilling association climb the first step on the ladder towards cost effective boreholes

In February 2008, the Government of Mozambique/UNICEF tendered out the first contracts. They were clustered in lots of 20-25 boreholes per district. However, the contractors were not attracted to the contract terms set, namely:

(i)            The deposit was too high, surpassing 100% of the legally allowed limits.

(ii)           Although the clusters were relatively small, the licences categories were high[1]. These terms only allowed international contractors to bid.

(iii)          The window of three months for drilling activities to take place was unrealistic for the drilling companies.

Caught by what should have been an opportunity, but was actually an unreasonable business situation, many drilling companies called the executive president of the drilling association, requesting his intervention.

One week later, the association engaged in negotiations with Government of Mozambique/UNICEF regarding the above. This led to some interesting results. First of all, the tender process was publicly cancelled, its terms revised including dropping deposit to legally acceptable levels. Secondly, innovative solutions to meet national contractors’ capacities and categories were identified.  For example, they were allowed to form consortiums in a flexible manner and in some cases, smaller clusters were arranged.  Finally, the drilling window was doubled to 6 months.

A meeting to assess developments was held on 19^th May 2008, at National Directorate of Water’s premises. Both parties concluded that negotiations went well, and that without the drillers association things would have been much more difficult. The bottom line is that the Mozambique Drilling Association has climbed its first step on the ladder towards cost effective boreholes.