The government will pay a contractor Sh40 million over a botched deal to build a prefabricated exhibition centre at the Kenyatta International Convention Centre (KICC).
High Court judge Lawrence Mugambi ordered KICC to pay Parbat Siyani Construction Limited after it scrapped plans to build the Sh799 million exhibition centre.
The judge said the money would compensate the contractor for the violation of its rights and that the Sh39.95 million was equivalent to the amount of the performance guarantee.
“In my very humble view, the respondent’s (KICC) conduct in this whole process does not demonstrate transparency or accountability in the handling of the procurement,” said the judge.
The court said the management of KICC was very much aware of the timelines required for the execution of a valid contract, after the notification of the award, yet it kept the contractor in limbo without updating the firm on the progress.
The firm through its director Mukesh Halai submitted that it emerged as the successful bidder after KICC announced the tender in 2018.
Mr Halai said the tender was re-advertised for the second time and his firm won the bid on January 31, 2019.
The firm was awarded the tender in April 2019, after which it was invited for the contract negotiations and presentation of the proposed design on May 13, 2019.
He said the signing of the contract was scheduled for May 16, 2019, but this did not happen after the signing was postponed to allow for further negotiations.
On May 22, 2019, the company said it submitted the bid security in the form of a performance guarantee from I&M Bank for Sh39.95 million in line with Clause 3.28.4 of the request for proposal.
A few days later, KICC cancelled the contract citing “circumstances beyond our control”.
KICC chief executive officer James Mwaura said no contract had been signed and that a notice of award did not constitute a contract.
Mr Mwaura added that the request for proposal required the contractor to give a performance guarantee within 28 days of the notification of award, but the company provided the same outside the stipulated period.
Justice Mugambi said the government had deliberately engaged in delaying tactics by taking the company round in circles until the tender validity period expired.
“It is my finding that the manner in which the respondent treated the petitioner does not align with the principles of procurement as set out in Article 227 (1) as such conduct cannot be described as transparent or fair,” he said.
The judge added that public bodies must not be allowed to abuse their powers.
