New law to curb tender wrangles

A law that will discourage unsuccessful bidders from using the courts to delay implementation of the government’s flagship projects is being drafted.

The Public Procurement and Disposal Act will be radically amended to introduce a requirement of hefty deposits of cash in courts for litigants challenging tender awards, National Treasury Cabinet Secretary Henry Rotich said on Thursday.

The aim, he said, was to stop petty litigation involving procurement and to increase efficiency in the process.

Parties challenging tender awards with the Public Procurement Oversight Authority will incur heavy financial costs.

“To do away with frivolous appeals, you will have to deposit a percentage of the value of the tender when challenging the award. This will show that you are serious about the matter,” said Mr Rotich.

He said appeals from individuals and companies were on the rise with litigants hoping the outcome would be overturned in their favour.

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The tenders include the Sh327 billion standard gauge railway project, the Sh53 billion Nairobi-Mombasa pipeline, and the Sh24 billion laptops for schools project.

Questions have also been raised over NSSF’s Sh7.1 billion Hazina Towers and Sh5 billion Tassia projects.

Others include the Sh14.9 billion communications and surveillance tender awarded to Safaricom and the Sh1.3 billion tender for the Kenya Bureau of Standards modern laboratory in Mombasa. President Kenyatta stepped in to end the row over the railway tender awarded to China Road and Bridge Corporation.

The project has been hit by fresh controversy over a Sh3.5 billion tender awarded to Edon Consultancy International LTD, Apec Consortium and Third Railway Survey and Design Institute Group Corporation.

The contract to replace and expand the Mombasa-Nairobi pipeline was awarded to Zhakem International Construction Ltd while the Public Procurement Administrative Review Board suspended the laptops tender awarded to Olive Telecommunications PVT Ltd.

The decision to award the Tassia Scheme and the Hazina Towers projects to China Jiangxi International Kenya Ltd recently stirred up a spat between Labour Cabinet Secretary Kazungu Kambi and Central Organisation of Trade Unions (Cotu) boss Francis Atwoli and Federation of Kenya Employers chief executive officer Jackline Mugo.

On Thursday, Senate Finance Committee chairman Billow Kerrow said the changes should include a requirement for litigants to deposit either Sh500,000 or Sh1 million with the courts when they file contesting suits.

“This is to ensure only serious people, who are ready to have their money held up go to court. It would also propose to limit the time frame for courts to conclude cases to maybe two weeks,” he said.

Senate Majority Leader Kithure Kindiki concurred on Monday, warning that the controversies were coming at a cost to the Jubilee administration.

“Unfortunately, the legal arrangement is costing the Jubilee Government as it takes a long time to implement projects which could be half way complete by now,” he said.

But Suna East MP Junet Mohammed warned of existence of a wider syndicate in the Jubilee tenders.

“The railway tender was awarded to a Chinese company and now TSDI which is another Chinese firm which together with China Roads and Bridge Corporation are State corporations, can undertake the supervision,” he said on Monday.

National Assembly transport committee chairman Maina Kamanda who spoke on the same day absolved the Jubilee Government from blame, saying most of the tenders were processed by the previous regime. He dismissed the tender wrangles as ‘teething problems’.