Kirubi, Ahmednasir in dog fight for coal power tender

Politics and policy

The drama unfolded as Energy ministry officials briefed the bidders on the process of picking the firm that is expected to build Kenya’s inaugural Sh174 billion coal plant. PHOTO | FILE | NATION MEDIA GROUP 

By ALLAN ODHIAMBO

In Summary

• The war of words between Mr Abdullahi and Mr Kirubi began after Mr Ngure announced that the tender committee had not concluded the overall cost analysis of the financial bids presented by the two rival consortiums because they used a coal reference type that was not in the tender document.

The fight over a multi-billion-shilling government tender to build a coal-fired power plant in Lamu yesterday took an ugly turn after a bare-knuckle war of words broke out between billionaire businessman Chris Kirubi and two Nairobi lawyers representing rival bidders.  

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The drama unfolded as Energy ministry officials briefed the bidders on the process of picking the firm that is expected to build Kenya’s inaugural Sh174 billion coal plant as part of the Lamu Port South Sudan and Ethiopia Transport corridor (Lapsset) project. The plant is expected to contribute 960 megawatts (MW) of power to the national grid.

The chairman of the tender evaluation committee Simon Ngure ignited the spat as he took the bidders through the process indicating that a consortium led by Centum Investment — a public listed company that Mr Kirubi chairs — and Gulf Energy had clinched the deal.

The briefing revealed that the Centum/Gulf Energy consortium had performed better than the two other bidders led by Shanghai Electric Power Company and HCIG Energy. Nairobi lawyers Ahmednasir Abdullahi and Fred Ngatia represented the Shanghai consortium.

Mr Ngure had presented tender evaluation results showing that the Centum-led consortium had presented the most favourable Specific Fuel Consumption (SFC) — a key determinant of the final Power Purchase Agreement because it defines the plant’s fuel efficiency which is critical in setting the cost of utility for consumers. Mr Ngure said the evaluation committee had awarded the Centum-led team an SFC of 0.42 kilogramme per Kilowatt Hour (KWh) against 0.43 for Shanghai and HCIG groups.

The war of words between Mr Abdullahi and Mr Kirubi began after Mr Ngure announced that the tender committee had not concluded the overall cost analysis of the financial bids presented by the two rival consortiums because they used a coal standard that was not in the tender document.

The two consortiums were found to have used the international coal standard of 29,000 kilojoules per kg (Kj/kg instead of the South African benchmark of 21,000 kj/kg specified in the tender document. Mr Abdullahi fired the first salvo when he accused the tender committee of making deliberate effort to award the contract to the Centum-led consortium.

“When you look at the evaluation process there is constant excuse-making for the Gulf Energy consortium,” Mr Abdullahi, who is representing the Shanghai group said, drawing applause from a section of the audience.

Mr Ngatia, also representing Shanghai, waded into the controversy, accusing the committee of siding with the Centum-led group and asked for fairness. “Each bid evaluation should be purely on merit and not reverse psychology... once you tell a bidder you passed the technical stage that is the end,” he said.

“You risk running into litigation because you will be telling Kenyans to pay Sh19 billion more by awarding the tender as it is currently,” Mr Ngatia claimed, drawing the ire of Mr Kirubi who fired back accusing the two lawyers of misleading the public.

“Kenya is ours and not for big people and global players who can pay big fees for big lawyers,” he said in defence of the Centum bid before asking the two lawyers to “go and live in China if they have ceased to be Kenyans”.

The remark appeared to have hit a raw nerve in the two lawyers who stormed out of the meeting promising to challenge award of the tender in court. “The meeting has degenerated into absurdities we can’t stand and we have opted to leave,” Mr Abdulahi said as he left the venue.

A visibly upset Energy secretary Davis Chirchir, who sat through the exchange, took to the podium and reprimanded Mr Kirubi for the broadside against the two lawyers. “I would like Mr Kirubi to be polite to other investors and use kind and polite language,” the minister said as he stood to restore calm in the meeting.

He said the ministry would review the grievances raised by the rival bidders before forwarding the evaluation report to the Treasury’s Public Private Partnership (PPP) unit and the Public Procurement Oversight Authority(PPOA) for approval.

“If the numbers used in the evaluation are wrong we are ready to have them challenged and we shall ensure they add up so that we don’t make mistakes that will affect other projects in future,” Mr Chirchir sai