Losers poke holes in tender deal

The planned construction of a Sh53 billion oil pipeline has ran into a hurdle after losing bidders challenged the tender awarded to a Lebanese firm.

The aggrieved companies appealed against the award to Zakhem International Construction citing irregularities.

An official of the Public Procurement Administrative Review Board Corporate Services Department, Mr Dido Guyatu, said yesterday: “We received requests for a review on May 30. However, we are not in a position to comment at this point.”

Four bidders want the board to reverse the decision by the Kenya Pipeline Company. Thirteen firms were interested in the deal.

HURRIEDLY VALUED

One of the losers said the valuation was done in a hurry and that it was not possible for bids for such a large sum of money to be evaluated in less than 10 hours “unless there was a prior choice.”

Zakhem International, a family-owned firm, shrugged off stiff competition from prominent Chinese competitors. The company submitted a Sh43 billion bid to replace a pipeline that has been used since 1978. Its offer was Sh10 billion below the estimates of KPC to build a 20-inch diameter pipeline from Mombasa to Nairobi.

The losers alleged that Zakhem’s bid was reduced by seven per cent under dubious circumstances by some tender committee members.

In May, the project was mired in controversy after some interested parties faulted the postponement of the opening of the bid at the last minute.

They said the postponement cost them millions of shillings in travel and accommodation expenses.

The companies, mainly from China and India, responded to the January 2013 international tender.

Kenya Pipeline Corporation has fought off allegations of irregularities.