Politics and policy
Kimunya loses as Chinese firm awarded Sh55bn airport tender
Transport minister Amos Kimunya suffered another blow on Wednesday in his bid to wriggle out of the controversy surrounding the award and suspension of a contract for construction of a Sh55 billion airport terminal to a Chinese firm.
The Public Procurement Oversight Authority (PPOA) ruled that Mr Kimunya had no basis in law to order the Kenya Airports Authority to cancel the award of the Greenfield Terminal tender to Anhui Construction Engineering Group of China.
The authority further ordered KAA to execute the tender with the Chinese firm within the next 30 days from Wednesday, saying the contract was valid to the extent that the firm had been notified of its bid being successful.
“In so far as KAA has not revoked the letter of award, the contract remains valid since the applicant had signed a letter of acceptance,” the PPOA board said in a ruling read by Akidi Okola, a board member.
He said the breaching the legal relationship created by the two documents could lead to claims of damages.
Anhui had after the notification entered into a joint venture with the China Euro International Company.
It is the second blow in three days that Mr Kimunya and the KAA board chaired by former Runyenjes MP Martin Nyaga Wambora have suffered after the Industrial Court ordered the board to reinstate KAA managing director Stephen Gichuki.
Mr Gichuki had been sent on compulsory leave last week on Friday to pave way into investigations over the speed at which the management processed the tender, apparently without the board’s blessings.
The controversy surrounding the tender had sucked in government agencies including the Cabinet sub-committee on infrastructure, the prime minister’s office, the attorney- general’s office and the Ethics and Anti-Corruption Commission.
The attorney- general and the EACC advised that the tender should go on since with the notification having been given and accepted by Anhui, cancelling it would have exposed the government and KAA to payment of penalties for damages.
Anhui had written to PPOA, seeking annulment of Mr Kimunya’s directive.
The applicant had also requested PPOA to direct KAA to execute the contract within a specified period, restrain both the ministry and parastatal from further interference and set aside calls that such contracts be awarded only to African firms.
In its ruling read by Mr Okola, the PPOA board upheld the contract. “We are certified that under Public Procurement Act, the board has the powers grant the applicant some of the prayers,” said Mr Okola.
The board, however, declined to stop the calls to restrict contracts to African firms or order the ministry and KAA board to refrain from future interference in the contract, saying it did not have such powers.
Mr Kimunya had ordered that the tender be cancelled because the speed at which it was issued - three days between tender award, notification and acceptance - was suspect. The KAA management declined to do so after legal advice from its lawyers and the attorney-general.
Although the office of the prime minister advised that the tender process be held up, to which the KAA management agreed, it said this was to allow the Cabinet sub-committee looking into the funding options given the vast resources required.
Claims of vested interests among the parties embroiled in the controversy have since emerged, including one that a public official was paid $1 million to block Anhui from handling the project in favour of a rival Chinese firm or another company from India.
Mr Kimunya said the KAA management disregarded the directive despite having received the letter from the prime minister’s office advising KAA to stop the tender and seek a Cabinet memorandum given the enormous resources needed for the project.
In sending Mr Gichuki on compulsory leave, Mr Wambora said the tender was awarded without the board’s approval.
He said the board had approved the project in principle to cost $500 million (Sh42 billion), the contract sum of the winning bidder was $654 million (Sh54.9 billion). The board appointed Mathew Wamalwa to Mr Gichuki’s position in an acting capacity.
However, Industrial Court judge Byram Ongoya on Monday ordering the board to reinstate Mr Gichuki until the dispute is resolved. When Mr Gichuki reported to the office yesterday, however, he was locked out.
Mr Justice Ongoya also directed that the board appear before him on Friday (tomorrow) for an inter-parties hearing.
On Wednesday last week, the KAA board announced the establishment of a committee of stakeholders which it said would insulate JKIA from procurement challenges like those witnessed in the Greenfield tender.
Members to the committee that would be charged with steering the project would be drawn from Kenya Airways (KQ), the Kenya Civil Aviation Authority (KCAA), Vision 2030 Delivery Board, the Attorney-General’s Office, the Treasury and the KAA Board.
The expansion of JKIA into a world class airport is expected help ease congestion problems and allow the facility to comfortably handle the growing number of visitors.
The expansion is also meant to improve cargo facilities, in which airlines have been investing heavily since it serves as an earnings cushion in times of depressed passenger numbers. On August 16 Speaker Kenneth Marende directed three committees - Budget, Finance and Transport - to probe the matter and report back to Parliament within 14 days, which end tomorrow.