Centum wins Sh164 billion coal power plant tender case

Politics and policy

A worker loads coal onto a truck at Sanyuan Coal Mine in China in January 2010. Centum is laying ground for the construction of a 960 megawatt coal power plant in Lamu. PHOTO | FILE 

By BRIAN WASUNA, bwasuna@ke.nationmedia.com

In Summary

• The Public Private Partnership Unit’s (PPPU) petition committee threw out an appeal filed by Hebei Construction Investment Group and Liketh Investments consortium (HCIG-Liketh), maintaining that there was no foul play in the tender evaluation process.
• Centum is in the process of hiring a chief financial officer to head the project development team that will be tasked with completing the project.
• The firm also recently secured a Sh14 billion real estate deal whose profits are expected to help fund the Lamu power plant project.

Billionaire businessman Chris Kirubi and his firm, Centum Investment, on Tuesday got the green light to sign a $1.8 billion (Sh164 billion) contract with the government to construct a 960 megawatt coal power plant in Lamu.

This followed the dismissal of a petition filed by one of the losing bidders in the tendering process.

The Public Private Partnership Unit’s (PPPU) petition committee threw out an appeal filed by Hebei Construction Investment Group and Liketh Investments consortium (HCIG-Liketh), maintaining that there was no foul play in the tender evaluation process.

HCIG-Liketh had in its petition questioned why Gulf Energy was allowed to join the Centum consortium despite being knocked out of the preliminary evaluation stages, contrary to procurement laws.

The consortium had also claimed it was unfairly evaluated and wanted a review of the process.

The PPPU committee, however, ruled that there is no provision in the Public Private Partnership Act that bars a bidder from replacing a member of its consortium.

“A bidder may replace a consortium member at a later stage of evaluation and this allowed the reconstitution. In view of this, the committee
finds that the reconstituted consortium was not a stranger in the tendering process,” committee chairman Kihara Muruthi said.

Centum had initially partnered with Sepco and Thermax, but the consortium was knocked out. The company opted to reconstitute its membership after being re-admitted so as to submit a stronger bid.

READ: PS denies rules were bent for Centum in coal plant tender

The ruling comes as a relief for Centum – which had already started laying ground for the construction of Kenya’s first coal power plant – both in its internal corporate structure and in its operations at the Nairobi bourse in a bid to fundraise for the multi-billion shilling project.

Centum is in the process of hiring a chief financial officer to head the project development team that will be tasked with completing the project.

The firm advertised the position in October last year. The company will also acquire close to Sh5 billion from the sale of its stake in UAP Holdings in the Nairobi Securities Exchange.

The firm also recently secured a Sh14 billion real estate deal whose profits are expected to help fund the Lamu power plant project.

Its rival, HCIG-Liketh, had also begun preparations for the project as it put in a bid to exploit coal deposits in Kitui’s Mui Basin. The firm’s bid was in November last year pre-qualified and it expected to use the Mui coal to power the Lamu plant.

Centum’s award of the tender in September last year sparked the legal battle as HCIG-Liketh moved to the High Court to challenge the PPPU’s decision.