Chinese firm faces ban over ‘misconduct’

Infrastructure contractor China Wu Yi may be facing a ban from competing for government contracts amid allegations of misconduct in the tender process for the construction of a new oil pipeline.

During a  hearing of the National Assembly’s Energy Committee yesterday, the Kenya Pipeline Company (KPC) said it was carrying out investigations into the manner in which confidential documents were leaked to China Wu Yi during the procurement process. KPC plans to institute criminal proceedings “against whichever party is found culpable”.

“That does not detract from the fact that KPC still maintains the prerogative to institute debarment proceedings against that particular bidder for engaging in practices contrary to the Act,” said KPC senior legal officer, Ms Gloria Khafafa.

Submit request
Debarment is an action taken by the Public Procurement Oversight Authority to disqualify a company from competing for government contracts for a period of not less than five years. Any concerned individual or party can submit a request to the PPOA to have a supplier debarred.

In an interview following the committee hearing, KPC managing director Charles Tanui, confirmed that the organisation was planning to commence debarment proceedings with the PPOA.

The documents in question were produced by China Wu Yi during a hearing before the Public Procurement Administrative Board. The company hoped that the documents would support a bid to have KPC review its decision to award the tender to a competitor Zakhem Ltd.

However, the board found that some of the papers had been leaked without authorisation from KPC.  Another document appeared to be “either a forgery” or not yet in its final form.

The board subsequently dismissed the case and ordered KPC to carry out investigations into the affair in order to “regain public confidence in the procurement process.”  The board left the decision to pursue disbarment to the discretion of KPC.

Bred controversy
One of the documents is a fax between KPC and one of its consultants Seng Li Engineering and Constructing Company.

China Wu Yi was one of nine companies that submitted bids to construct the pipeline. However, the decision by KPC to award the Sh43 billion tender to Lebanese firm Zakhem has bred controversy.

In addition to three applications filed with the Public Procurement Administrative Board to review the tendering process, the award has also been challenged in court. However, rulings in all the instances have been in favour of KPC.

Two parliamentary committees, the Energy committee and the Public Investments Committee (PIC), are now investigating the manner in which KPC awarded the tender to Zakhem.

On Tuesday, PIC advised KPC to halt work on the project until the matter is resolved. Both committees have raised questions on the speed with which KPC seems to have reviewed tender documents as well as Zakhem’s experience and reputation.

China Wu Yi’s profile in Kenya has risen over the past few years. The company was one of three contractors who build the Thika Super Highway.

Since then, it has bagged a number of other large contracts including the extension of Langata Road, the construction of 22-storey complex for the University of Nairobi and the setting up of the Kenya Commercial Bank building in Upper Hill, Nairobi.