Sh1.5bn transformers tender frozen on bias claim at Kenya Power
Kenya Power has been dealt a blow after the procurement regulator froze a Sh1.5 billion tender for transformers following protest from local manufacturers. PHOTO | WACHIRA MWANGI | NMG
Public Procurement Administrative Review Board (PPRB) suspended the tender, which was announced in March, pending the determination of an appeal filed by five local companies.
The companies argue that the tender requirements are skewed, unfair, and meant to shut out local manufacturers from the multibillion-shilling deal in favour of foreign firms.
The tenders demanded firms with 10 years manufacturing experience, but local firms say they are in breach because they were set up in 2015.
Kenya Power #ticker:KPLC has been dealt a blow after the procurement regulator froze a Sh1.5 billion tender for transformers following protest from local manufacturers fretful of being locked out of the deal.
Public Procurement Administrative Review Board (PPRB) suspended the tender, which was announced in March, pending the determination of an appeal filed by five local companies.
The companies argue that the tender requirements are skewed, unfair, and meant to shut out local manufacturers from the multibillion-shilling deal in favour of foreign firms.
The tenders demanded firms with 10 years manufacturing experience, but local firms say they are in breach because they were set up in 2015.
“The procurement proceedings are hereby suspended and no contract shall be signed between the procuring entity and the tenderer awarded the contract unless the appeal has been finalised,” the board said in a short ruling.
Kenya Power has been seeking to increase the supply of transformer equipment to match increased connectivity, especially in rural areas.
Kenya also suffers regular power failure owing to a dilapidated transmission network hinged on ageing transmission lines and transformers.
Business leaders have blamed the power outages for stunting economic growth.
The freeze on the transformer deal comes days after manufacturers of meters moved to the board and stopped a Sh2 billion tender for the supply of single-phase, three-phase postpaid and prepaid meters, arguing that locking them out in preference of foreign companies is discriminatory.
The meter manufacturers said the utility firm invited bids for the supply of the meters and placed conditions, which will only allow an international procurement model for the power distribution products.
Yesterday, five companies including Pan Africa Transformers & Switchgears, Nairobi Transformers, and Empower Transformers, said the utility firm had also locked them of the tender by placing restrictions that only favours foreign manufacturers.
The tender for the supply of transformers was uploaded on Kenya Power’s website on March 11, 2022. The tender documents were amended three times and each time, introduced conditions that local manufacturers said are hard to meet.
Local contractors
Through H&K Law advocates, the local manufacturers said the apparent favouritism was a violation of the principle of legality, which dictates that there must be a rational connection between the decision taken and the purpose.
The local firms argue that the public procurement regulations require a procuring to encourage participation by local contractors to promote the local industry.
They argue they have been supplying the transformers for more than five years and Kenya Power has never complained of failures. “This the sudden change in policy to incorporate foreign tenderers without stakeholder engagement is unwarranted and unreasonable,” court documents stated.
