Two Chinese firms are locked in battle for a Sh1.25 billion ($12.49 million) contract for the design, supply and installation of an advanced metering system to Kenyan Power.
The public procurement watchdog has, in a ruling that put Kenya Power on the spot, nullified the award of the contract to Chinese telecommunications equipment and systems company ZTE Corporation.
ZTE last year beat rival, Shenzhen Star Instrument which specialises in manufacture and supply of smart energy meters, to the lucrative contract aimed at supporting Kenya Power’s revenue collection.
The Public Procurement Administrative Review Board (PPARB) held a month-long hearing in which Shenzhen Star accused Kenya Power of breaching the law in awarding the deal to ZTE Corporation.
The PPARB panel comprising chairman Paul Gicheru and members Rosemary Gituma, Nelson Orgut and Peter Bita Ondieki nullified the award to ZTE saying Kenya Power had abused the time validity of a tender clause by making several extensions of the tender against procurement regulations.
“Taking into account all the above findings and observations, the board holds that there was in fact no valid extension of the tender period in this case and the validity expired by operation of law on the 30th day from the date of tender opening,” it ruled.
“The award of the said tender to the firm of ZTE Corporation be and is hereby annulled and is set aside,” the board said.
The board further directed the Kenya Power to re-advertise the tender within a fortnight and ensure that evaluation is done within the law.
In arguing its case, Shenzhen Star through lawyer Stephen Owino had claimed that ZTE Corporation was “primarily a telecommunications company providing telecommunications equipment and network solutions,” and has “never been known to have capacity to manufacture the major component of the meter data management system.”
Shenzhen Star also claimed that ZTE Corporation’s “lack of capacity” to deliver the project was “clearly demonstrated” by the cancellation of its contract on pre-paid meters in Zimbabwe and “substandard” pre-paid metres in a contract between it and Jirama Limited in Madagascar.