Pipeline faces Sh600m tender row suit just days to key ruling

A second company has moved to court within a span of two months seeking orders to stop the Kenya Pipeline Company (KPC) from proceeding with a Sh600 million project over allegations of breach of contract.

Nyoro Construction Company Ltd, under a certificate of urgency, is seeking orders to stop the award of the tender to India’s Prashanth Projects Ltd to construct additional white oils storage tanks at KPC’s Nairobi terminal.

Nyoro, through lawyer Walubengo Waningilo, says in documents filed in court that after the financial and technical tender evaluation process, Prashanth and Nyoro emerged winners and were awarded the tender for the works.

“After the tender was awarded by KPC through a letter dated July 3, 2014, Prashanth has sidelined us and is intent on proceeding with the works without us, despite the existing business arrangement.

“Prashanth’s action is meant to lock out local participation, contrary to provisions that require that foreign tenderers must submit their bids in association with local firms whose purpose is to ensure sustainable promotion of local industry,” said Mr Walubengo.

BEHIND THE BACK

The lawyer said it had come to the attention of his client that KPC had arbitrarily, unprocedurally, and prejudicially paid Prashanth Sh600 million ($7,193,295.20) behind the back of Nyoro Company.
Mr Walubengo, who appeared before Justice Francis Gikonyo, said that unless the orders were granted, his client stood to lose investment in terms of time, human and financial resources.

He said the two companies had been holding meetings where decisions affecting the entire contract had been made without notification, knowledge and participation of his client.

Nyoro is seeking a temporary injunction restraining KPC from handing over the contract site to Prashanth pending the hearing and determination of the suit.

In his supporting affidavit, Nyoro’s Josiah Njoroge Njuguna said the tender was open to both local and foreign companies with a precondition that foreign companies must partner with local ones.

“We were approached by Prashanth, a company incorporated in India, for a business partnership to bid for the tender. We drew up a memorandum of understanding which was subsequently signed by directors of both companies before submitting it to KPC,” said Mr Njuguna.

Justice Gikonyo directed the plaintiff to serve the documents to Prashanth and KPC. He set the case for mention on Friday.