AfDB objects to award of Sh62.3bn dam tender to Sino Hydro

The African Development Bank (AfDB) has opposed the awarding of a controversial Sh62.3 billion Thwake dam tender; a day after Irrigation Principal Secretary Patrick Nduati Mwangi defied his boss Eugene Wamalwa and awarded the contract to the second lowest evaluated bidder.

Mr Gabriel Negatu, the AfDB regional department director has written to the PS rejecting requests to the bank to give a no-objection to the award of the contract to STECOL Corporation (Sino Hydro Tianjin Engineering Co Ltd) instead of the lowest bidder—China Gezhouba Construction Group Corporation (CGGC).

This means that the bank does not support the award of the contract to Sino Hydro, and will withhold funding.

“Based on the information provided, the Bank regrets to inform you that no objection to award the tender to the second lowest bidder CAN NOT be given since there is no justifiable reasons to reject the least evaluated bidder,” Mr Negatu wrote to Mr Mwangi in a letter dated March 28 and copied to Head of Public Service Joseph Kinyua and cabinet secretaries Eugene Wamalwa (Water) and Henry Rotich (Treasury).

Mr Mwangi disregarded AfDB, the Attorney General, the Ethics and Anti-Corruption Commission (EACC) and Mr Wamalwa’s advice to award the contract to China Gezhouba.

China Gezhouba won the Tender Processing Evaluation Committee (TPC) stage with a Sh36.9 billion bid for the first phase of the multibillion shilling dam, but the Ministerial Tender Committee (MTC) appointed by Mr Mwangi awarded the contract to (Sino Hydro) at a cost of Sh39.5 billion.

Mr Mwangi awarded the contract to Sino Hydro subject to lowering the bid price to Sh36.9 billion.

AT LOGGERHEADS

Mr Negatu said AfDB’s procurement rules and procedures prohibit modification of bids including negotiation of price for works.

“The bank would like to remind you that in accordance with clause 1.11 of the procurement rules and procedures…does not finance expenditure…that has not been awarded in accordance with agreed provisions in the financing agreement upon procurement plan to which the bank provided no objection,” the AfDB boss said.

Mr Wamalwa and Mr Mwangi have been at loggerheads over the award of the tender to the lowest bidder (China Gezhouba).

Picking the winner of the contract has sparked a vicious war between the two officials.

Mr Wamalwa last week warned Mr Mwangi that he will be held personally responsible if his decision to award the tender will result in an extra cost of Sh3 billion from the lowest evaluated bidder.

Mr Negatu in his letter told Mr Mwangi that the award of the contract to China Gezhouba was in line with the bank’s procurement rules, which supersedes any national procurement laws in line with the loan agreement signed between the government and the AfDB in January 2014.