Battle over lucrative Nairobi to Nakuru road tender goes to court

The battle over a multibillion-shilling tender to construct the 187km Nairobi-Nakuru-Mau Summit road headed to the High Court Thursday, with the losing consortium seeking to be told why a rival bidder was selected.

But Justice John Mativo declined to stop proceedings filed before the Public Private Partnership Petition Committee, which was to hear the issue in the afternoon. The judge instead certified the matter as urgent and directed the parties to argue the case on April 1.

'BLINDFOLDED'

Through lawyer Andrew Musangi, the consortium of Mota-Engil Engenharia (Portugal), Orascom Construction (Egypt), Egis Projects SA (France) and African Infrastructure Investment Fund 3 Partnership argued that it wrote to the Kenya National Highways Authority (KeNHA) seeking to be told why the rival consortium was picked.

The Mota-Engil Engenharia team sought to be told why Vinci Highways SAS, Meridian Infrastructure Africa Fund and Vinci Concessions SAS were picked as the preferred bidder while they were selected as the reserve bidder. The consortium refers to itself as Rift Valley Connect (RVC).

Mr Musangi said the request was not granted, forcing them to file the case before the committee, which ruled that they should raise the issue of disclosure during the hearing of the main case.

They went to the High Court to challenge the ruling.

Mr Musangi said that raising the issue during the full hearing of the case was akin to asking them “to swim blindfolded”.

He pleaded with the court to order the status quo to be maintained, pending the hearing of the petition. “It is not too much to ask to be allowed to know if things were done in the right way,” he said.

There would be no financial losses, suffering or punishment for the bidders because the contract was yet to be signed, he said.

REDRESS

Prof Albert Mumma, for the winning bidder, opposed the application, saying the court did not have the jurisdiction to hear the case.

He said that a request for information is made under a certain framework that provides for remedies in case it is denied.

Prof Mumma said the applicant did not follow the right procedure and urged the judge to dismiss the suit. He said the applicant was running away from the forum where it voluntarily sought redress.

In the ruling, Justice Mativo declined to stop the proceedings before the committee and directed the parties to file their responses before the hearing date.

In the petition before the committee, the Mota-Engil group argued that the forum was its last chance to challenge the awarding of the deal. In its letter of complaint, Mota-Engil accused KeNHA of “engaging in a non-transparent bidding process … by cloaking the entire evaluation process in secrecy and intrigue to the extent that its fairness and impartiality are highly questionable and its outcomes irredeemably inconsistent with a fair process to the bidders.”

At the heart of Mota-Engil’s complaint is a claim that RVC will pay less in taxes to the government over the 30-year period during which the road will be under concession. RVC submitted the lowest bid at Sh159.5 billion, while Mota-Engil quoted Sh194.9 billion. However, it was later found that both firms used the wrong formula to compute their income tax obligations to the government.

RVC’s computation saw it understate income tax projections by more than Sh30 billion over the period, while Mota-Engil overstated its obligations by more than Sh1.6 billion.