Kenya Power has defended the move to lock out local assemblers from a tender for the supply of electricity meters worth Sh2 billion, arguing that it restricted the procurement due to high failure rates of the gadgets local companies sell.
The power utility firm said it restricted the tender to reduce meter failures in single-phase and three-phase prepaid meters.
Kenya Power was responding to a case filed by local assemblers who have argued that the decision was discriminatory and contrary to a policy by the company to promote local industry.
“Further the respondent avers that the justification to bring on board international suppliers and expand specifications criteria is informed by the high failure rate of the meters supplied by the local meter assemblers as well as respondent’s (KPLC) internal policy on sourcing for the best value for the best suppliers,” the company said in court documents.
The power utility company added that associated costs for meter failures on average for the last three years amount to colossal sums of money, through replacing defective meters, a move the company says had also dented its image and reduced customer satisfaction levels.
The local manufacturers have argued in a case filed at the Public Procurement Administrative Review Board that the conditions placed by Kenya Power were to edge out local manufacturers and assemblers who have all been supplying the company with the meters since 2015.
Their lawyer, Titus Koceyo, said the restrictions placed in the tender and favouring foreign manufacturers over local manufacturers and assemblers violate Article 10 of the Constitution on national values and principles to promote local manufacturing.
“The Applicant’s members are apprehensive that the Respondent in a hurried manner to implement the Task Force Report out of context and to achieve ulterior motives inserted conditions in the impugned tender whose net effect is to disqualify the members of the Applicant from participating in the tender,” he said in his submissions.
Kenya Power, however, said that tier-one companies, which are mostly foreign firms, are generally the largest or the most technically capable companies in the supply chain.
Its lawyer, Irene Walala, said the foreign firms have the skills and resources to supply the critical components that original equipment manufacturers need and they have established processes for managing suppliers in the tiers below them.
Kenya Power, she said, is committed to providing its customers with the highest attainable quality, for energy sustainability as well as making the most economically viable decisions for the growth of its own business.
She urged the board to dismiss the case stating that the local assemblers were yearning for exceptions and sympathy without basis.