Companies

China Wu Yi writes off Sh10bn road contract from its books

kenha

Kenya National Highways Authority (KeNHA) director-general Peter Mundinia. PHOTO | FILE

China Wu Yi has written off from its books the Sh10 billion contract for the upgrade of Garsen-Witu-Lamu Road in the ongoing high-stakes bidding tussle with H Young.

The firm has, however, downplayed the loss of the tender to the local rival contractor saying it will not affect its 2016 revenues.

China Wu Yi was in July awarded the tender for the project but the Public Procurement Administrative and Review Board (PPARB) later overturned the decision and instead issued it to H Young.

“The cancellation of the project will not have a significant impact on the company’s financial position and operating results for the year 2016,” China Wu Yi said in an announcement posted on its website.

“International contracting business is fierce competition, there is a certain degree of uncertainty.”

The announcement says that on October 5 the firm received communication from the Kenya National Highways Authority (KeNHA) cancelling the bid notice issued in July.

Tom Nyaoke of China Wu Yi directed the Business Daily to KeNHA saying that the contracting agency retains the right to award a tender to the firm that they feel is well placed.

KeNHA, on its part, said that it could not comment on the matter as it is in court. KeNHA moved to court in September to contest PPARB’s decision to overturn the tender award.

READ: H Young, China Wu Yi lock horns over Sh10bn deal

The tender for the 113 kilometre road remains in the balance after High Court judge Justice George Odunga ordered that implementation of the PPARB decision be put on hold until he determines the suit filed by KeNHA.

The basis for PPARB’s decision to overturn the award was that H Young is a local contractor while China Wu Yi is not. As per Kenya’s procurement laws, local firms get preference during evaluation of bids for public projects.

KeNHA says that H Young had not submitted ownership evidence during the tendering. KeNHA director-general Peter Mundinia says in court papers that PPARB allowed H Young to present evidence on its ownership that had not been submitted during the tender evaluation process.

“At the hearing of H Young’s request for review, the board illegally admitted extrinsic evidence which had not been originally submitted during the tendering process.

‘‘The review board concluded that H Young is a citizen contractor despite the evidence tendered to KeNHA indicating otherwise,” Mr Mundinia says.

The project involves upgrading earth/gravel sections to bitumen standards and reconstruction of the paved section. The road is the key access to Lamu where a new port is being built and connects the port town to a bitumen road in Garsen.