Procurement tussle threatens to jettison plans for largest dam - Daily Nation
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Procurement tussle threatens to jettison plans for High Grand Falls dam

Sunday September 2 2018

floods

Flooded homes at Bandi Village in Garsen after Tana River burst its banks on May 18, 2018. The ambitious High Grand Falls dam along River Tana is supposed to remedy perennial flooding. PHOTO | FILE | NATION MEDIA GROUP 

By KITAVI MUTUA
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A British consortium which won the tender to construct the Sh200 billion multi-purpose High Grand Falls dam along River Tana is embroiled in a procurement dispute with the National Irrigation Board, after five Chinese firms lost the lucrative contract.

The dispute, which has been playing out at the Public Procurement Administrative Review Board (PPARB) for the last four months, now threatens to delay Kenya’s ambitious plans to host one of the largest multipurpose dams in Africa.

London based GBM Engineering Consortium was among seven pre-qualified international construction firms — five of them Chinese which participated in the bidding process under the fund, design, build, own, operate and transfer model of the multi billion project but the National Irrigation Board has twice declined to accept its win.

Documents seen by the Nation show how the tendering was done during which the six companies were eliminated at the preliminary stages after they failed to proof their technical and financial capacities but the matter has remained unresolved.

STANDARD GAUGE RAILWAY

The High Grand Falls Project is the single-largest undertaking by the government after the Standard Gauge Railway, and is part of the Sh1.5 trillion Lamu Port and Southern Sudan-Ethiopia Transport Corridor (Lapsset) projects.

In terms of size, the proposed water reservoir in Kitui and Tharaka Nithi counties will be Africa’s second largest after the Aswan High Dam in Egypt along the River Nile and Kenya’s biggest dam covering a massive 165 square kilometres.

This week, the Public Procurement Review Board which had earlier heard and determined the dispute in favour of the British construction firm on July 4, will be hearing an appeal after the procuring entity, the NIB disregarded its ruling and cancelled the tender.

The dispute over tender number NIB/T/018/2016-2017 arose on May 29 when National Irrigation Board cancelled the tender after it emerged that only GBM Consortium had met the preliminary conditions set out in the request for proposals, including a mandatory site visit.

MANDATORY SITE VISIT

The other bidders were China Huadian Engineering Co Ltd, China Machinery and Engineering Corporation, China Machinery and Engineering Corporation, China International Water and Electric Group, China National Complete Engineering Corporation and El Noor General Contractors.

According to an affidavit sworn by Mr Michael John Short, the Managing Director of GBM Consortium, NIB had on October 19 last year, advertised in the local dailies inviting the seven pre-qualified bidders for a mandatory site visit slated for November 8th.

This prompted the National Irrigation Board to disqualify the six firms from the tendering process and begin technical evaluation of the sole bid by GBM, with assurances that the British firm will be invited within a period of 21 to 30 days to discuss financial component of the tender.

Mr Short narrates that, as required, GBM solely submitted their tender documents on November 30, last year where they were opened the same day at the Nile Basin boardroom of NIB’s Unyunyizi house headquarters, in presence of their representatives Mr Kamotho and Mr Peter Mathews.

TENDERING PROCESS

Having been knocked out in the earlier stage, the other six firms never raised any objections, therefore legally making GBM the winner of the tendering process.

However, the NIB went silent for six months until May 29 when they wrote to GBM notifying of its decision to cancel the tender, prompting the British firm to seek redress at the Public Procurement Review Board.

On its part, NIB said it cancelled the tender because the British firm failed in the technical evaluation and had not submitted the bid security of 0.5 per cent.

After hearing the dispute, the Procurement Review Board chaired by Mr Paul Gicheru nullified the National Irrigation Board’s decision to cancel the tender and directed it to evaluate the GBM’s sole bid and award the tender.

GBM Consortium now wants the procuring entity held to account for failing to comply with the orders of the procurement review board and for contravening various tendering laws.

The firm, through their lawyer Mr Nyamu, claims they won the tender competitively and that the National Irrigation Board is in breach of Section 80 of the Public Procurement and Disposal Act 2015.

EVALUATION STAGE

Mr Nyamu said NIB used illogical and unreasonable basis to disqualify the British firm and that claims that his client did not provide bid security was untrue because the bond was supposed to be submitted during financial evaluation stage.

The appeal will be heard by the procurement review board on Tuesday, September 4, where the irrigation will be required to explain why they disregarded its ruling.

A source told the Nation that the dispute has attracted the attention of the British government and was part of issues discussed during the bilateral talks between Prime Minister Theresa May and President Uhuru Kenyatta last Thursday. 

The procurement dispute is holding plans to proceed to the next phase of land acquisition where affected persons will be relocated to allow for construction of the Vision 2030 project, also widely seen as a legacy for President Kenyatta.

5.6 BILLION CUBIC METRES OF WATER

Construction of the dam, that will hold more than 5.6 billion cubic metres of water, is expected to take six years, with at least 4,500 households occupying the project area in Kitui and Tharaka Nithi counties set to be displaced.

Apart from producing 700 Megawatts of hydro power, the project will also facilitate the irrigation of more than 250,000 hectares of land in Kitui, Garissa and Tana River counties, besides helping address the perennial flooding menace in coast region.

PROJECT BIDDERS

1) GBM Engineering Consortium

2) China Huadian Engineering Co Ltd

3) China Machinery and Engineering Corporation

4)  China Machinery and Engineering Corporation

5) China International Water and Electric Group

6) China National Complete Engineering Corporation

7) El Noor General Contractors.