MPs question Kenya Pipeline boss over Sh43 billion tender

Lawmakers on Tuesday put Kenya Pipeline boss Charles Tanui on the spot over the award of a Sh43 billion tender to a Lebanese firm.

The National Assembly’s Public Investments Committee is looking into claims of irregularity in the tender which was given to Zakhem International Construction Ltd to build a new oil pipeline between Mombasa and Nairobi.

MPs questioned the timelines followed by Kenya Pipeline in awarding the tender as well the formula used by the government parastatal in choosing Zakhem’s as the most favourable bid.

“How is it possible for you to open a financial bid on June 3 and on the same day you award the tender? How is it practical?” committee chairman Adan Keynan asked.

The team also admonished Mr Tanui for failing to respond to invitations on previous occasions. Mr Keynan repeated an earlier call on the government to halt work on the project pending the conclusion of the committee’s inquiries.

The team questioned the due diligence carried out by Kenya Pipeline on Zakhem. According to Mr Keynan, the company is “blacklisted” in several African countries, including Nigeria and Ghana.

However, Kenya Pipeline responded saying that previous partnerships with Zakhem as well as documents produced were sufficient evidence on the company’s experience and reputation.

“The current pipeline, line 1, which had an original design for 25 years and which we are still using until this day well into its 36th year, was actually constructed by the very same Zakhem International Construction. Therefore it is not correct to say that we are completely ignorant and we did not take any care to find out whether Zakhem are qualified to carry out this project,” Kenya Pipeline senior legal officer Gloria Khafafa said.

MPs contend that Zakhem was allowed to provide a bid bond from a non-Kenyan bank, Ecobank Nigeria, while other firms had been struck off the shortlist for similar transgressions.

However, Kenya Pipeline argued that there had never been a specific requirement in the tender documents for companies to use local banks, only that the financial institutions should have operations in Kenya. Ecobank Nigeria operates in the country through Ecobank Kenya.

Thirteen firms were short-listed for the job. By May last year, nine submitted their tenders, including Zakhem, China Wu Yi Company and Kalpataru Power Transmission Ltd.

Although China Wu Yi submitted the lowest financial bid at Sh39.8 billion, the company was disqualified on technical grounds.