Tender for 1.5 billion shillings for transformers frozen following claim of bias at Kenya Power

Economy

Tender for 1.5 billion shillings for transformers frozen following claim of bias at Kenya Power


Kenya Power has been dealt a blow after the public procurement regulator froze a 1.5 billion shilling tender for transformers following protests from local manufacturers. PICTURES | WACHIRA MWANGI | NMG

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Summary

  • The Public Procurement Administrative Review Board (PPRB) has suspended the tender, which was announced in March, pending a decision on an appeal filed by five local companies.
  • The companies argue that the tender requirements are biased, unfair and aimed at excluding local manufacturers from the multi-billion shilling deal in favor of foreign companies.
  • The tenders required companies with 10 years of manufacturing experience, but local companies say they are in breach because they were set up in 2015.

Kenya Power #ticker: KPLC has been dealt a blow after the public procurement regulator froze a 1.5 billion shillings tender for transformers following protests from local manufacturers worried about being left out of the bid ‘deal.

The Public Procurement Administrative Review Board (PPRB) has suspended the tender, which was announced in March, pending a decision on an appeal filed by five local companies.

The companies argue that the tender requirements are biased, unfair and aimed at excluding local manufacturers from the multi-billion shilling deal in favor of foreign firms.

The tenders required companies with 10 years of manufacturing experience, but local companies say they are in breach because they were set up in 2015.

“The procurement procedure is suspended and no contract will be signed between the procuring entity and the tenderer to whom the contract has been awarded unless the appeal has been finalized,” the council said in a brief decision. .

Kenya Power has sought to increase the supply of processing equipment to match increased connectivity, particularly in rural areas.

Kenya also experiences regular power outages due to a dilapidated transmission network based on aging transmission lines and transformers.

Business leaders have blamed power outages for stunting economic growth.

The transformer deal freeze comes days after meter makers moved to the board and halted a 2 billion shilling tender for the supply of single-phase postpaid and prepaid meters, three-phase, arguing that locking them in preference to foreign companies is discriminatory. .

The meter makers said the utility company has issued a tender for the supply of the meters and placed conditions, which will only allow for an international sourcing model for power distribution products.

Yesterday, five companies including Pan Africa Transformers & Switchgears, Nairobi Transformers and Empower Transformers said the utility company had also locked them out of the tender by imposing restrictions that only favor foreign manufacturers.

The tender for the supply of transformers was uploaded on the Kenya Power website on March 11, 2022. The tender documents were amended three times and each time introduced conditions that local manufacturers reported difficult to adhere to.

Local contractors

Through H&K law advocates, local manufacturers said the apparent favoritism was a violation of the principle of legality, which dictates that there must be a rational connection between the decision made and the purpose.

Local businesses argue that government procurement regulations require procurement to encourage the participation of local contractors to promote local industry.

They claim to have been supplying the transformers for over five years and Kenya Power has never complained of any outages. “This sudden change in policy to bring in foreign bidders without stakeholder engagement is unwarranted and unreasonable,” court documents said.

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Rosemary C. Kearney