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Irish company claims KPC pumps tender inflated by Sh400m

KPC depot in Eldoret. An Irish company wants KPC compelled to award it the pumps supply deal, arguing it put in the lowest bid. PHOTO | FILE
KPC depot in Eldoret. An Irish company wants KPC compelled to award it the pumps supply deal, arguing it put in the lowest bid. PHOTO | FILE 

Irish firm Ruhrpumpen Limited has claimed in court that Kenyans will pay an additional $4.3 million (Sh400 million) if Kenya Pipeline Company contracts Japan’s Ebara Corporation to supply pumps for the new Nairobi-Mombasa pipeline.

Ruhrpumpen claims KPC unlawfully pushed it out of a deal to supply the devices to be used in the ongoing construction of the new Sh44.2 billion Mombasa-Nairobi pipeline, and subsequently contracted a firm that provided a higher bid for the pumps.

The Irish firm wants KPC compelled to award it the deal, arguing it put in the lowest bid.

A Lebanese company—Zakhem International Construction Limited—is constructing the pipeline.

Ruhrpumpen says it had proposed to supply the pumps for $15.5 million (Sh1.4 billion) while Ebara bid $19.8 million (Sh1.8 billion).

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“The decision will result in loss of public funds in that Zakhem will pay an additional $4.3 million (Sh400 million) on a contract that shall deliver more expensive equipment of lesser proven efficiency,” said Rui Moreira, the Irish firm’s managing and sales director.

The Irish firm said KPC managing director Charles Tanui is bent on ensuring Ebara is awarded the lucrative deal, and may fast-track the process.

KPC, however, argues that it will not pay any additional amount, as the deal signed with Zakhem does not provide for any additional payments for items needed to complete the pipeline.

It maintains that the Sh44.2 billion covers every item and labour required for the multi-billion shilling project.

Ruhrpumpen, however, insists that it is a renowned pump manufacturer, and that KPC and Zakhem are trying to mislead the court in stating otherwise.

Kenya Pipeline holds that Ruhrpumpen was knocked out after discovery that it is not a manufacturer.

The State agency says it wanted the deal awarded to a firm that produces the mainline, booster and submerged pumps.

KPC has dismissed the claim by Ruhrpumpen. “KPC has the benefit of world class consultancy services who provide expert advice and opinion on all aspects of the project. No loss of public funds will occur. The agreement with Zakhem is on a fixed amount which includes supply of the pumps,” said Gloria Khafafa, KPC’s senior legal officer.

Zakhem has said in suit papers that it has been wrongly enjoined in the suit as no cause of action has been requested against it.

The Lebanese company, however, holds that it carried out selective tendering and agrees that Ruhrpumpen was knocked out because it is not a manufacturer.

The Ministry of Energy and Petroleum in January said in a report that the project is ongoing, as the replacement of line 1 that has been in use for 34 years has already begun. The line to replace it is expected to be commissioned in 2017.

Ruhrpumpen has further claimed that its devices have a superior pump efficiency of 82.8 per cent compared to Ebara’s 78.5 per cent.

KPC, however, argues that the Irish firm’s statistics have not been backed up by any evidence hence should be disregarded by the court.

“Ruhrpumpen’s contention regarding the superiority of its products, based as it is on a self-serving basis, should be disregarded,” added Ms Khafafa.

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