power purchase agreements
Law.

Following the advice from one of the financiers, Kenya Power cancelled a tender for the supply of equipment for the Last Mile Connectivity Project to a Nigerian bidder.

The Standard reported that as a result, International Engineering Nigeria is suing the power utility for cancelling its tender for the supply of metres and extension of power lines for the project.

The Last Mile Connectivity Project is aimed at affordably connecting poor households to the national electricity grid. Read more…

The media cited the court papers stating that the African Development Bank (AfDB) was the financier that advised Kenya Power against the choice of the Nigerian firm, which lead to the cancellation of the tender.

Under the AfDB phase II of the project, 314,200 households are meant to be connected using 5,320 existing distribution transformers across multiple counties including Nandi, Kakamega, Bungoma, Nakuru, Samburu, Laikipia and Nyeri at a cost of Sh13.5 billion ($138 million).

Kenya Power tender evaluation

“The applicants bid for lot three and lot nine were declared successful pursuant to the recommendations of Kenya Power tender evaluation committee dated July 14, 2017,” says International Engineering lawyer Albert Mumma in court papers seen by The Standard.

“However, the respondent disqualified the applicant’s bids for lot three and lot nine purportedly on the basis on the recommendation of the project financier African Development Bank contained in a letter from the Director General of AfDB dated August 28, 2017, addressed to the managing director and CEO of Kenya Power.”

The tender was then issued to a joint venture between India’s Bajaj Electricals Ltd and local renting and leasing firm Wayne Homes Kenya.

According to the Daily Nation, International Engineering Nigeria states that Kenya Power gave the consortia the tender despite a prohibitive order by the Public and Procurement and Review Board (PPARB).

The Nigerian firm maintains that the power utility had earlier disqualified it over alleged conflict of interest despite being the lowest bidder. The decision was, however, reversed by the PPARB following a successful appeal.

Awarding of the tender

The PPARB had directed Kenya Power to award the Nigerian firm the contract, but now it claims the order was disobeyed.

“The applicant indeed had legitimate expectations that since no party had challenged the decision of the Board in the request for Review no. 98 of 2017 then the said decision was final and binding and that the respondent (Kenya Power) would award the subject tender to the applicant in compliance with the orders of 1st interested party (PPARB),” says Nigerian firm in papers filed in court.

According to the firm, after evaluation it was declared the successful bidder for the five regions but before it was formally awarded, the AfDB allegedly raised the issue of conflict of interest.

 

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