Corporate News
How rejected bid set off row over airport contract
Kenya Airports Authority Managing Director Engineer Stephen Gichuki (left) and the General Manager Procurement, Allan Muturi (right) while appearing before the joint committees on Finance, Planning, Trade and Transport on August 23, 2012. PHOTO / SALATON NJAU Nation Media Group
Posted Thursday, August 30 2012 at 19:29
In Summary
- The rejection of a tender application by one of the bidders, China State Construction Engineering Corporation, is behind the Sh55 billion airport expansion row.
- Kenya Airports Authority (KAA) managing director Stephen Gichuki said he was called by a senior Ministry of Transport official over why the tender committee had rejected the tender from the company, which was 30 minutes late.
- Gichuki declined to name the official despite parliamentary proceedings being privileged and not exposing respondents to victimisation.
- A total of 110 companies bought the tender documents, but only five companies submitted their applications on time.
- The tender was awarded on December 15th 2011.
- Transport minister Amos Kimunya, however, ordered the tender committe to cancel the tender in January 2011.
The rejection of a tender application by one of the bidders, China State Construction Engineering Corporation, is behind the Sh55 billion airport expansion row.
Kenya Airports Authority (KAA) managing director Stephen Gichuki said he was called by a senior Ministry of Transport official over why the tender committee had rejected the tender from the company, which was 30 minutes late.
Mr Gichuki, who was reinstated to the position by the Industrial Court after the KAA board sent him on compulsory leave a week ago, told the official that it was illegal to accept submissions after the deadline.
“The issue of cancelling the tender came from the Ministry of Transport. We were called by a senior official and told that the five bids we had received were not enough,” Mr Gichuhi told the joint parliamentary committee investigating the controversy surrounding the tender.
He declined to name the official despite parliamentary proceedings being privileged and not exposing respondents to victimisation.
He said the representatives of the firm arrived 30 minutes late.
The parliamentary committees on Transport, Budget and Finance, had demanded to know why the KAA board had decided to terminate the contract for the construction of the Greenfield Terminal, which was won by Anhui Construction Engineering Group, also of China.
Yesterday, the KAA board told the committees that it cancelled the tender because it “was uncompetitive.”
Board chairman Martin Wambora said the board was kept in the dark and exercised its oversight role.
“We are not saying that the procurement had any problem. It is the issue of uncompetitiveness. It was the ending of the tender with one resource envelope that led us to direct the cancellation of the same,” Mr Wambora said.
He said alarm bells started ringing when it emerged that the contract had been varied from the approved $500 million to $668 million, a $154 million difference. Mr Gichuki said more details had been included in the 2011 version, which raised the cost of the project.
A total of 110 companies bought the tender documents, but only five companies submitted their applications on time.
The tender was awarded on December 15th 2011. Transport minister Amos Kimunya, however, ordered the tender committe to cancel the tender in January 2011.
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