Companies

Chinese company challenges award of Sh164bn Lamu coal plant tender

coal

Gulf Energy managing director Francis Njogu speaks to journalists at a media briefing at Crown Plaza in Nairobi on Feb. 24, 2015 where the company announced plans to set up a coal fired power plant in Lamu County. The award of the tender is now being challenged in court. PHOTO | SALATON NJAU |

The High Court will on Monday hear an urgent application filed by a consortium of the HCIG Energy Investment Company of China and its local partners, Liketh Investment Kenya Ltd, challenging the award of the Sh164 billion coal plant tender in Lamu to a rival.

HCIG claimed that the Ministry of Energy and Petroleum had unlawfully awarded the tender to a consortium that did not participate in the tender.

READ: Chinese firm signs Sh96bn contract for Lamu coal-fired electricity plant

The consortium, through lawyers Ndegwa Njiru and Simon Mburu, said out of the 26 entities that had been invited to submit their expression of interest (EOI) regarding the construction of the plant, only 10 passed the EOI stage.

However, the ministry proceeded to award the tender to the Gulf Energy consortium, which was not, as presently constituted, among the 10 pre-qualified bidders that were requested to submit their technical and financial proposals.

Lawyer Njiru explained that the ministry had acknowledged that by February 2014, they knew that the bid by the consortium of Cennergi Pty Ltd, Tata Power, Exarro Resources Ltd and Gulf Energy was grossly flawed, because Tata Power is the majority shareholder of Exarro Resources Ltd while at the same time Cennergi Pty Ltd is a subsidiary of Exarro Resources Ltd.

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