Last week, three justices at the Kenyan High Court comprising of Asike Makhandia, William Ouko and Agnes Murgor, ruled for the multi-billion-shilling geothermal power accessories tender to proceed.

The Daily Nation reported that the Court of Appeal ruled in favour of a consortium led by Rentco East Africa against another consortium led by Russian firm OJSC Power Machines Ltd.

Geothermal power accessories tender

It is reported that from the technical and financial analysis presented, there was no doubt that the proposal by Rentco East Africa, Lantech Africa and Toshiba Corporation consortium had the highest megawatt output.

“This also presented the highest availability factor and tariff combination through which Kenya Electricity Generating Company Ltd (KenGen) would get the highest revenue, of $785,000,” the justices ruled.

Meanwhile, the OJSC Power Machines, Transcentury and Civicon consortium had the lowest guaranteed output but the highest connection cost, media reported.

KenGen had told the court that awarding the contract to OJSC’s consortium would translate to the power generating firm foregoing net annual revenue of $1 million.

Breaking down revenue

The Daily Nation further reported that the Public Procurement Administrative Review Board had noted that OJSC’s consortium had not provided a breakdown of its proposed monthly revenue of $822,000. Read more…

KenGen drew the conclusion that the difference between OJSC’s consortium net guaranteed output of 50.5MW and that of Rentco’s consortium (58.42MW) was equivalent to 15%.

“KenGen appreciated that if the tender was awarded to OJSC’s consortium, then some 7.42MW would have to be obtained through the expensive thermal power, which would translate to a daily cost of Sh4 million ($38,000),” the three-judge Bench stated.


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