Indian firm to appeal axing of laptop tender

There is a new development in the controversy surrounding the tendering of 1.2 million laptops for Standard One laptops.

Saturday it emerged that India’s Olive Telecommunications PVT was set to appeal the ruling that threw them out of the tender.

The new development could further jeopardise plans by the Jubilee government to fulfil President Uhuru Kenyatta’s largest and most ambitious campaign promise as the case drags on in court.

Olive’s lawyers are planning to turn up the heat on the Public Procurement Review Board whose ruling snatched a Sh 24.6-billion business from the jaws of the IT firm.

And yesterday it also emerged that the Ministry of Education had begun implementing the ruling after it initiated the process of assembling a new team of experts to re-evaluate offers and conduct due diligence on Olive’s rivals —Hewlett Packard Europe-BV and China’s Haier Electrical Appliances Corporation Ltd — as ordered by the board.

Sources told the Sunday Nation that lawyers Ahmednassir Abdulahi and Mohammed Nyaoga have been engaged to appeal the ruling made on Tuesday by the Procurement Review Board.

“It is true that Olive will be mounting a massive appeal against that ruling. My colleague Nyaoga is coordinating everything and we will be moving to court within the week,” Mr Abdulahi said.

The court battle for the billions set aside by the government to introduce integrated information technology into Kenyan primary schools is just one among the dozens of challenges against rulings made by the review board.

REPUTATION

The appeal is an attempt to secure business by the Indian firm which is in deals to enter the Kenyan market and also to protect the reputation of the experts who worked in various stages of the project.

Ms Josephin Mongare led the Public Procurement Review Board in making the ruling as its acting chair and Mr Paul Gicheru is expected to take over as the board’s new chairman.

Ministry officials, the Indian firm and some of the experts who participated in the exercise have accused Ms Mongare and her board of having acted “strangely” by ignoring “a heap” of documents supplied to the court by the ministry to defend every decision it made.

Olive chairman Arun Khanna dismissed the ruling terming it an outrageous piece of judgment.

“Our  lawyers are working round the clock to find a clear way forward on this; we do not want to divulge additional information as to what next just yet,” Mr Khanna stated.

In a statement to newsrooms, he said: “From the review board verdict it is clear that there were a lot of vested interests at play during the tendering process.”

He also claimed that there has been biased reporting on the tendering process with the local media targeting his company without listening to its side of the story.

“We respect Kenyan laws. We respect the legal institutions. But how could such a decision be made yet we successfully went through the entire process? This scares off investors,” he said.

Education permanent secretary Belio Kipsang, whose docket has been in the spotlight over the tender, told the Sunday Nation that though he was not interested in challenging the ruling by the review board, the ministry was equally perplexed. He said documentation and exhibits annexed to their response to the board were “flatly ignored”.

DISMISSED

“In their ruling the Review Board claimed that there was no agreement or a memorandum of understanding showing the partnership between Olive and Century Optronics but we supplied a copy of an MoU to prove the relationship as required,” the PS said.

The board also dismissed the relationship between Olive Telecommunications PVT and its other sister companies including Olive Telecommunications-Hong Kong and Olive Global Holdings Private Ltd.

A certified International Organisation for Standardisation certificate produced by Olive indicated that they were laptop manufacturers. Olive maintains that the definition of what an Original Equipment Manufacturer is was also misconstrued in the ruling despite an expert presentation during the board’s hearing.

DISCREPANCY

Olive has maintained through an advert that its joint bid with CNC was in excess of Sh17 billion while the tender document had specified an annual turn-over of Sh8 billion only.

In its ruling, the board said that between 2010 and 2012 the annual turnover of the Indian firm was between Sh6 million and Sh768 million which they said amounted to Sh1.1 billion way below the required Sh8 billion.

A question was also raised on the review of prices claimed to have pushed the final value of prices for the Indian company by Sh1.4 billion.

But Saturday the PS said: “We are wondering where they got all these outrageous figures from — we just don’t know.”

The ministry has announced it will initiate an internal audit of the entire exercise just to find out whether its officers got everything right when handling the tendering.

“It is important that we conduct an internal review of the whole exercise just find out if something went wrong, but as far as we are concerned we did our best,” said Prof Jacob Kaimenyi.

It has also emerged that some key politicians in the Jubilee government with related business interests could have been involved in playing underground games either to sabotage the process or to profit from emerging circumstances.

If the appeal is filed it will be the third time the process is running into trouble after being first advertised in  August last year and cancelled this year because all bidders quoted prices above government budget.

Then came the appeals by the two firms which delayed the rolling out of the project planned for the end of March.

This week’s court action could further delay the implementation of the tender.

Olive’s final offer was Sh24.6 billion while HP offered Sh25 billion and Haier Sh25.1 billion.