KenGen wins Sh900 million tender procurement case

by Wakili Liam
General (Rtd) Samson Mwathethe EGH, MBS, DCO (Right)- Chairman of the Board (Independent and Non-Executive Director) and Mrs. Rebecca Miano, MBS, KenGen Managing Director and Chief Executive Officer (CEO)

Kenya Electricity Generating Company (KenGen) has won a procurement case where two firms, Lex Oilfield Solutions Ltd & CFAO Kenya Ltd had sued it for awarding a tender to to H. Young & Company (East Africa) Ltd.

The two energy infrastructure firms had challenged the Sh900 million tender award citing irregularities.

Justice Anthony Ndung’u said the court did not have the authority to determine the appeal filed by the Joint Venture of Lex Oilfield Solutions Ltd & CFAO Kenya Ltd because the 45-day statutory deadline had lapsed.

He said section 175(3) of the Public Procurement and Disposal Act provides that the High Court should determine the judicial review application within 45 days.

“It is clear from the provision (of the Act) that the same is couched in mandatory terms and as such this court is obligated to render a decision within 45 days of filing of the Judicial Review application. The proceedings herein were initiated on October 19, 2021,” said the judge.

According to the Act, the court was supposed to have determined the matter before December 6, 2021. The advocates of the procuring entity and the winning bidder informed the judge that the proceedings were a nullity for being overtaken by events.

The ruling on January 12, 2022 paves the way for KenGen to sign the deal with H. Young & Company.

Before forming the joint venture, Lex Oilfield was among the six companies that responded to the tender for the improvement of the circulation water system at Olkaria II power station and compaction grouting (EPC), which was advertised through the dailies in March last year.

The company said in the court documents that whereas its bid was responsive, it was notified that CFAO Kenya was the lowest bidder. Lex Oilfield later decided to enter into a joint venture with CFAO.

But the power generating company later picked H. Young & Company as the winning bidder being the lowest after quoting Sh909.7 million.

According to Lex Oilfield, the evaluation committee at first did not make a recommendation for the award because there were no funds but instead recommended for reallocation of Sh110 million to facilitate the tender.

Following the decision, Lex Oilfield rushed to the Public Procurement Administrative Review Board (PPARB) seeking the cancellation of the tender but the case was struck out summarily, prompting the company to move to the High Court with an appeal. While dismissing the appeal, Justice Ndung’u observed that since the proceedings were past the 45-day statutory deadline any attempt to proceed with the matter and deliver a judgement on merit would be futile and an unwarranted assumption of a no-existent authority

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