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Economy

Watchdog cancels Kenya Power Sh4bn Last Mile tender

Faith Waigwa.
Public Procurement Administrative Review Board chairperson Faith Waigwa. The board termed the procurement unlawful. PHOTO | SALATON NJAU  

Kenya Power #ticker:KPLC, the electricity distribution monopoly, is on the spot after the procurement watchdog nullified tendering of a Sh4.1 billion contract for the construction of substations and power lines under the Last Mile Connectivity Project.

The Public Procurement Administrative Review Board (PPARB) terminated the contract funded by the French Development Agency (Agence Française de Développement) following a weeklong hearing in which, local contractors accused Kenya Power of breaching the law in locking local firms from bidding in favour of foreigners.

The PPARB panel comprising of chairperson Faith Waigwa, and members Joseph Gitari, Nicholas Mruttu, and Rahab Chacha in the January 27 ruling called the process, which was in advanced stages “unlawful”, saying the electricity distributor abused the local preference clauses in procurement laws by locking out local contractors.

The watchdog in its ruling said that Kenya Power ought to have “unbundled” or divided the tenders into smaller lots to allow the participation of local contractors.

“The procurement entity’s bidding document for procurement of design, supply, installation, commissioning of transmission lines and substations issued on 20 August 2019 be and is hereby nullified and set aside,” ruled the board.

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“The procuring entity is hereby directed to retender within 45 days from the date of this decision.”

Local contractors failed to make the cut for the tender protesting Kenya Power’s technical and financial specifications which they said mainly favoured moneyed foreign firms including Chinese contractors.

The contractors under the Energy Sector Contractors Association (ESCA), subsequently moved to the public procurement watchdog seeking to stop the awarding of the tense.

They had argued that Kenya Power was discriminatory towards Kenyan-owned firms and that its tender had favoured foreign companies.

The local contractors through lawyer Kibe Mungai had argued that tender specifications had “unrealistic turnover not feasible in the Kenyan economy for citizen contractors.”

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