KenGen’s Sh900m tender case dismissed


The High Court has dismissed a case filed by two energy infrastructure firms challenging a decision by Kenya Electricity Generating Company #ticker:KEGN (KenGen) Gen to award a Sh900 million tender to H. Young & Company (East Africa) Ltd.

Justice Anthony Ndung'u said the court did not have the authority to determine the appeal filed by the Joint Venture of Lex Oilfield Solutions Ltd & CFAO Kenya Ltd because the 45-day statutory deadline had lapsed.

He said section 175(3) of the Public Procurement and Disposal Act provides that the High Court should determine the judicial review application within 45 days.

"It is clear from the provision (of the Act) that the same is couched in mandatory terms and as such this court is obligated to render a decision within 45 days of filing of the Judicial Review application. The proceedings herein were initiated on October 19, 2021," said the judge.

According to the Act, the court was supposed to have determined the matter before December 6, 2021. The advocates of the procuring entity and the winning bidder informed the judge that the proceedings were a nullity for being overtaken by events.

The ruling on January 12, 2022 paves the way for KenGen to sign the deal with H. Young & Company.

Before forming the joint venture, Lex Oilfield was among the six companies that responded to the tender for the improvement of the circulation water system at Olkaria II power station and compaction grouting (EPC), which was advertised through the dailies in March last year.

The company said in the court documents that whereas its bid was responsive, it was notified that CFAO Kenya was the lowest bidder. Lex Oilfield later decided to enter into a joint venture with CFAO.

But the power generating company later picked H. Young & Company as the winning bidder being the lowest after quoting Sh909.7 million.

According to Lex Oilfield, the evaluation committee at first did not make a recommendation for the award because there were no funds but instead recommended for reallocation of Sh110 million to facilitate the tender.

Following the decision, Lex Oilfield rushed to the Public Procurement Administrative Review Board (PPARB) seeking the cancellation of the tender but the case was struck out summarily, prompting the company to move to the High Court with an appeal.

While dismissing the appeal, Justice Ndung'u observed that since the proceedings were past the 45-day statutory deadline any attempt to proceed with the matter and deliver a judgement on merit would be futile and an unwarranted assumption of a no-existent authority.