British firm in fresh fight over Sh200 billion mega dam tender

Faith Waigwa, PPARB chairperson. FILE PHOTO | NMG 

In Summary

• The consortium of British companies was denied the contract by NIB after failing to show proof of ownership or capacity to hire equipment prompting a long-running dispute.
• Six companies were eliminated at the preliminary stages after they failed to prove their technical and financial capacities, but the matter has remained unresolved.
• Now the review board has set aside the NIB’s decision and ordered it to review the firm’s tender proposal and make a fresh assessment.

By BRIAN NGUGI
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A British engineering firm is set for a fresh round of a heated tender war with the National Irrigation Board (NIB) over a lucrative contract to build and operate a Sh200 billion massive dam in eastern Kenya that has been muddled by a protracted procurement dispute.

Kenya's Public Procurement Administrative Review Board (PPARB), the State agency that handles disputes arising from government tendering, has asked the irrigation agency to review the bidding again restricting it to British’s firm’s proposal leaving the fate of the consortium GBM and ERG Engineering in NIB’s hands.

The consortium of British companies was denied the contract by NIB after failing to show proof of ownership or capacity to hire equipment prompting a long-running dispute.

The firm was among seven pre-qualified international construction firms — five of them Chinese — which participated in the bidding under the fund, design, build, own, operate and transfer model of the multibillion-shilling project but the NIB has twice declined to accept its bid as a winner.

Six companies were eliminated at the preliminary stages after they failed to prove their technical and financial capacities, but the matter has remained unresolved.

Now the review board has set aside the NIB’s decision and ordered it to review the firm’s tender proposal and make a fresh assessment.

“The procuring entity’s letter of notification of tender outcome dated October 8 2018 be and is hereby annulled and set aside,” ruled the lawyer Faith Waigwa led agency, according to documents seen by the Nation.

“The procuring entity is directed to reinstate the applicants request for proposal back into the evaluation process and re-evaluate it at the technical stage.”

The PPARB panel comprising chairperson Faith Waigwa, and members Hussein Were, Peter Ondieki, Rosemary Gituma and Nelson Orgut also extended the validity of the tender to allow the NIB conduct the fresh evaluation.

“The tender validity period for this tender is extended for a further 45 days from the 9th day of November 2018 to enable the procuring entity complete the evaluation process,” said the order dated 13th November 2018.

Fresh valuation

All eyes will now be on NIB as it undertakes the fresh evaluation. While cancelling the tender, NIB General Manager Gitonga Mugambi had earlier argued that the British firm did not show proof of ownership of machinery required for the works.

"Your firm attained a technical score of 68.5 per cent, which was below the minimum technical score of 70 per cent due to failure to show proof of ownership or capacity to hire equipment, in form of logbooks or signed agreements," read Mr Mugambi's letter dated October 8.

The latest decision by the PPARB panel, now leaves GBM’s fate in the hands of NIB again promising a fresh round of dispute between the duo.

The project is critical based on its unprecedented scale and is second in importance to the government only to the Sh327 billion China funded Mombasa-Nairobi Standard Gauge Railway.

The High Grand Falls Dam along the Tana River will accommodate a 700MW hydropower plant, and make a large reservoir, displacing thousands of households for irrigation in Eastern Kenya.

The British consortium had been pushing for the PPARB to set aside NIB’s decision to cancel the tender, and review the tendering process but also compel NIB, the procuring entity, to declare them winners.

The latest high stakes battle for the mega dam tender by the British firm is similar to another one involving a British firm.

British security printer De La Rue won a Sh11.1 billion (£85 million) three-year contract to design and print Kenya’s new generation currency last year after a long-standing dispute dogged the tender. The dispute ended at the review board.

The award of the contract came after the Court of Appeal on October 12 reversed the High Court’s earlier decision to quash De La Rue’s winning of the tender.

The decision will allow the CBK and the security printer to proceed with production of the new currency notes as required under the 2010 Constitution.