Kenya Power in court to save Sh4.3bn contract

Kenya Power #ticker:KPLC has gone to court to challenge the cancellation of a Sh4.3 billion tender, setting stage for another round of tussle over plans to connect 300,000 Kenyans in rural areas.

In a case filed before the High Court, Kenya Power said claims by local contractors that they were discriminated against in favour of foreign companies were unsubstantiated.

Further, the national electricity distributor said the tender was subject to an agreement with the European Investment Bank for the project, known as Last Mile connectivity.

And as such, the contract is subject to English law and which can be settled through the court of justice of the European Union, the utility firm argues.

The tender was cancelled by Public Procurement Administrative Review Board (PPARB) early this month after a group of local contractors under Energy Sector Contractors Association challenged the procurement process.

The PPARB, comprising of chairperson Faith Waigwa, and members Joseph Gitari, Nicholas Mruttu, and Rahab Chacha cancelled the process, saying the electricity distributor abused the local preference clauses in procurement laws.

It said 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.

But Kenya Power said the board acted in excess of its jurisdiction in dealing with the matter.

“The respondent (board) assumed jurisdiction to hear and determine the dispute and thereby acted illegally,” the documents stated.

The power utility said the purpose of the contract is to attain universal access to electricity for the Kenyan population by 2030.

The scheme, it said, targets to connect about 300,000 new customers in 32 counties to the national grid.

The board’s decision might lead to cancellation of the entire funding of the 60 million Euros, Kenya Power said.