Chinese firm drops suit against Centum Lamu coal plant award

A worker loads coal onto a truck at Sanyuan Coal Mine in China. PHOTO | FILE 

By SANDRA CHAO-BLASTO

In Summary

• HCIG was seeking to overturn the Public Procurement Oversight Authority (PPOA) decision awarding the lucrative project to the Centum and Gulf Energy consortium.

A Chinese company that had gone to court disputing award of the Sh164 billion Lamu- based coal power plant to a consortium that includes NSE-listed Centum Investments has withdrawn its case.

Hebei Construction Investment Group (HCIG) and its Kenyan partner Liketh Investments had gone to the High Court seeking to overturn the Public Procurement Oversight Authority (PPOA) decision awarding the lucrative project to the Centum and Gulf Energy consortium.

The parties wrote to the deputy registrar of the judicial review division on June 16 seeking to register their consent over the matter.

The consent said that the Chinese firm was withdrawing all complaints it had against the decision of the PPOA’s petition committee in January.

“The ex-parte applicant confirms that it shall not challenge the award of the tender for the development of one 900-1000 megawatt coal power plant in Lamu County awarded to the Gulf Energy consortium by the Ministry of Energy and Petroleum on September 1 in any forum,” the letter said.

HCIG-Liketh had in the new application said that the procurement watchdog was wrong to allow Centum and Gulf Energy to participate in the process after initially being knocked out at the first round.

READ: Chinese company challenges award of Sh164bn Lamu coal plant tender

The Chinese company claimed that PPOA had mis-interpreted the law when it ruled that the decision by the Energy ministry to allow reconstruction of the Centum-Gulf Energy consortium was sanctioned in law.

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

It then partnered with Gulf Energy, Sichuan Electric Power Construction Company and CHD Power Plant Operation Company.

HCIG-Liketh said that it offered the lowest cost for construction of the plant at Sh43 billion per year compared to Centum’s Sh46.6 billion.

After dismissing the appeal PPOA’s petition committee slapped the Chinese firm with Centum-Gulf Energy’s legal bill of Sh181 million. The firm wanted the High Court to also review that decision.

The consent entered by the parties however showed that the bill resulting from the petition had also been settled.

Centum, in its bid documents, said construction of the Lamu plant would take 36 months, double the time HCIG-Liketh had stated.