Two years ago, while with a group of
fellow Kenyans on a tour of the massive dams the Ethiopians have built
in the Gibe area, we found ourselves debating how our northern neighbour
had managed to roll out huge infrastructure projects at a faster pace
than ours.
We all concluded that it had something to do
with our procurement system and the fact that, in this country, a
disappointed contractor can hold a project hostage for months on end
through procurement appeals and the court system.
Indeed,
our procurement appeals system operates more or less like a casino: if
as a contractor, you are dissatisfied with the outcome of a tender, you
double your stakes and go to the Public Procurement Appeals Board.
If
you are dissatisfied with the appeals board’s decision, you treble your
stakes and go to the High Court. And if you are still dissatisfied, you
go to the Court of Appeal.
The
expanded democratic space we have has also caused the mushrooming of
single-issue lobby groups and civil society organisations that have
mastered the art of public interest litigation, always on call to move
to court to block and delay procurement and implementation of projects.
The
parliamentary committee system has also become a major player. It is
not uncommon to find one procurement project being subjected to parallel
investigations by multiple parliamentary committees, the Procurement
Appeals Board, and the High Court, all at once.
Is this
a good trend? Opinion is divided. A friend argues that Kenya has found
itself caught up in what he describes as the transparency cult. Another
argues that as a society, we must accept to pay the high price for the
democracy we are enjoying.
Projects are expensive in
Kenya because contractors build in ‘procurement risks” associated with
delays and uncertainty around procurement of large projects.
We
may deride Ethiopia as a pseudo-democracy, but is it not the height of
irony that we are now going to import power from the country?
Last
year, we signed a contract under which Ethiopia will export to us what
is going to be by far the cheapest power to go into our national grid.
The electricity will be hitting our grid at US 7 cents a unit, nearly
half what we buy from KenGen.
Transparency is a very
good thing, But we need to find out a way of insulating the integrity
institutions we have around procurement of infrastructure projects from
capture by disappointed contractors.
CASES DISMISSED
Right
now, we are in the middle of rolling out one of the largest
infrastructure projects in the country, namely,the Nairobi- Mombasa
multi-product pipeline.
The tender for the construction
of the pipeline was awarded by the Kenya Pipeline Company to Zakhem
Construction International Ltd at a cost of $484.5 million.
As
expected, the two disappointed contractors lodged a complaint with the
appeals board, alleging irregularities in evaluation and award of the
tender.
The two cases were dismissed last week. The
parliamentary Committee for Energy and Communications has waded in,
ordering the board and management of Kenya Pipeline to appear before
them to answer allegations about irregularities in the award of the
tender.
Is it right for the parliamentary committee to
interfere in the matter, especially after the ruling of the Public
Procurement Appeals Board?
What I know for sure is that this country needs a new pipeline between Mombasa and Nairobi like yesterday.
The
existing line, which was commissioned way back in 1978, was found to
have suffered extensive corrosion during an in-line inspection conducted
in 2010.
According to the report, by the company, NDT
Middle East, repairing the pipeline would be more expensive than
building a new one.
We need new investments in
petroleum infrastructure even as we prepare for the major developments
happening in the oil and gas sector.
Uganda has plans
to construct an inland refinery. We have discovered oil and the
government has just announced plans to build a crude oil pipeline from
Lokichar to Lamu.
The Nairobi-Mombasa pipeline is a strategic investment for the country
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