New storm brews over pipeline tender

The Sh35 billion Mombasa-Nairobi oil pipeline is mired in fresh controversy after a section of bidders faulted a decision by the Kenya Pipeline Company to postpone opening of the tender at the last minute.

The bidders who are among 13 firms that have expressed interest in the tender yesterday said the last postponement was the third one in a row.

DAYS HAD ELAPSED

“We are wondering why the opening of the tender had to be postponed when the seven days allowed to extend the tender had elapsed,” said a bidder who talked to the Nation on condition that he is not named.

They said the postponement had cost them millions of shillings in travel expenses, accommodation and missed business opportunities.

When contacted, KPC managing director Mr Charles Tanui told the Nation that the tendering had been postponed to Friday.

“It is true the bid opening date has been pushed back to Friday from today. The procuring department within KPC sought an extension because they required certain clarifications,” he said.

“The process is ongoing and is within the law. PPOA (Public Procurement Oversight Authority) has also cleared the final tender document. They also supported us in our challenge against the court case brought by Richmond Productions,” Mr Tanui added.

He said the bidders were a mix of local and foreign companies. China and India each had four bidders. The rest are Korean, Dutch and Kenyan companies.

The Vision 2030 flagship project tender has been marred by allegations of irregularities after KPC reportedly removed midstream, a clause that requires companies to prove that they can obtain 70 per cent financing before being short-listed.

RIGHTS DIVISION

The battle spilled over to the Constitution and Human Rights Division of the High Court where it was resolved.

However, on Wednesday both Energy principal secretary Joseph Njoroge, and pipeline authorities gave an assurance that despite the controversy that is stalking the Sh35 billion tender, the pipeline project will progress well.

The new multi-products oil pipeline is to be laid over a 450km distance between the coastal city and the capital.

“Tenders have been sent out and are expected back by Friday,” said the PS in an e-mail response.

Pipeline managers also confirmed that the process was proceeding without a hitch. “We will open the tenders on May 15. Our target is to build the line within two years after award of the tender,” said Kenya Pipeline Chief Manager for Engineering and Technical Services Elias Karumi.

When completed in 2016, the new line will replace the existing 14-inch diameter line which has been operational since 1978.