H Young, China Wu Yi lock horns over Sh10bn deal

Kenya National Highway board member Julius M’ndegwa and director general Peter Mundinia (right) address journalists in Mombasa in May. PHOTO/FILE
Kenya National Highway board member Julius M’ndegwa and director general Peter Mundinia (right) address journalists in Mombasa in May. PHOTO/FILE 

The Kenya National Highways Authority (KeNHA) has sued the public procurement tribunal for awarding H Young & Company East Africa a Sh10 billion roads tender at the expense of China Wu Yi, setting up a battle between the two contractors.

The KeNHA says in court filings that the Public Procurement Administrative and Review Board (PPARB) allowed H Young to admit evidence on its ownership that had not been submitted during the tender evaluation process.

The allegedly illegal evidence, it adds, was used to snatch the mega deal from China Wu Yi and given to H Young.

KeNHA director-general Peter Mundinia adds that the chairperson of the board that handled the review is a lawyer for both the highways authority and H Young but refused to disqualify himself from the proceedings despite the allegedly glaring conflict of interest.

But H Young denies having the review board chair on its panel of legal service providers. The firm adds that KeNHA should have appealed against the alleged conflict of interest before the review board began hearing the main case regarding award of the Sh10 billion tender.

Justice George Odunga has ordered that implementation of the PPARB’s decision be put on hold until he has determined the suit filed by KeNHA.

“At the time of making the impugned decision, the review board was illegally constituted as the chairperson who presided had both apparent and perceived bias taking into account that he is a practicing advocate whose firm is enlisted on the panel of both KeNHA and H Young.”

“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.

H Young insists that it would have been the affected party in the event that there had been a conflict of interest. The firm adds that KeNHA should have objected to the new documents before the review board went on to determine whether China Wu Yi had been fairly awarded the deal.

As per Kenya’s procurement laws, local firms get preference during evaluation of bids for public projects.

The tender is for construction of the Garsen-Witu-Lamu road and is part of the government’s planned 10,000 kilometres of road project which has a budget of Sh70 billion.

During the review proceedings, H Young produced passports of its directors Joseph and Hannah Schwartzman. The directors wholly own the contracting firm through another company — H Young Holdings Limited.

KeNHA argues that during tender evaluation H Young & Company East Africa only provided documents showing that it is owned by H Young Holdings Limited hence they should not have been allowed to produce ownership documents of the parent firm before the review board.