Inside Sh200bn tender war for High Grand Falls Dam

The National Irrigation Board is on the spot over its alleged mishandling of the tendering process for the planned Sh200 billion multipurpose High Grand Falls Dam on River Tana.

Last week, the irrigation agency was fined Sh250,000 by the Public Procurement Administrative Review Board (PPARB) for defying several orders on the tender dispute.

According to PPARB ruling seen by the Nation, the NIB has until February 26 to pay London-based GBM Engineering Consortium the fine in addition to reinstating the firm's request for proposal — which it had disqualified — back into the evaluation process.

The High Grand Falls Dam 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 projects.

'LARGEST DAM'

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

NIB has been ordered to pay the fine within 21 days in the latest twist to the tendering controversy that has dragged on for almost two years.

"The procuring entity shall pay to the applicant cost of this application an amount of Sh250,000, and shall provide proof of payment to the Board within 21 days" read the ruling delivered on February 5.

The fine is an indictment on how it has handled the tendering process and it reinforces claims by the bidder that it is protecting vested interests.

FRESH TENDER

The PPARB expressed regrets that NIB seemed hell-bent to determine the tendering process in a particular way and award the contract to a firm of its choice instead of giving all bidders equal and fair chance.

The fine arose after it disobeyed another ruling given on November 13 last year, directing that it reinstates GBM Engineering's request for proposal — which it had quashed — back into the appraisal process, after it was found to have flouted procurement laws.

The board also set aside and nullified NIB's decision disqualifying the British consortium and ordered that the fresh tender evaluation be done in 21 days.

"The procuring entity is directed to reinstate the applicant's tender back into the evaluation process and re-evaluate it at the technical stage, in specific, correcting the mistakes established by review board and complete the procurement process within 21 days" read the ruling.

'GM CITED'

Instead, NIB went silent until January 10 when it asked for time extension to comply with the orders. This was more than five weeks after the expiry of the 21-day notice. 

The British firm, through Nairobi lawyer Wilfred Nyamu protested the apparent maltreatment and flouting of the procurement laws, arguing that the extension should have been sought before December 4 within the legally stipulated time.

"There's a reason why courts and tribunals exist and their orders must be obeyed by all people and institutions. NIB is clearly determined to frustrate this bidder (GMB) in favour of their preferred contractor" said Mr Nyamu.

Mr Hussein Were, who chaired the procurement board cited NIB for contempt of court for ignoring the numerous orders and gave general manager Gitonga Mugambi a further 14 days to first comply with last year's orders.

"The procuring entity is hereby granted an extension of 14 days to comply with the decision dated November 13, 2018. The tender validity period is extended for a further 81 days, from December 24, 2018, to enable NIB complete the process" read the tough ruling.

This means, NIB has no option other than to re-evaluate the tender as directed and award the contract to GBM Engineering on or before March 15.

NIB STANCE

Efforts to get a comment from Mr Mugambi were in vain but one of his deputies Mr Charles Muasya said NIB couldn't comply with the orders because staff broke early for Christmas holidays.

Mr Muasya, who is in charge of design and planning of irrigation projects, said they were consulting with the Attorney-General on the fine.

The official denied accusations that NIB was using flimsy excuses and flouting procurement procedures to frustrate the British firm into abandoning the tendering process and pave way for its preferred bidder.

He said the irrigation agency had obeyed all the orders except the one that nullified their decision to cancel the bid by GBM Engineering.

The dispute over tender number NIB/T/018/2016-2017, now threatens to delay Kenya's ambitious plans to build one of the largest multipurpose dams in Africa.

PREQUALIFIED BIDDERS

GBM Engineering was among seven prequalified 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 multibillion project.

While cancelling the tender, NIB said the firm did not show proof of ownership of machinery or capacity to hire equipment required for the works.

"Your firm attained a technical score of 68.5 percent which was below the minimum technical score of 70 percent due to failure to show proof of ownership or capacity to hire equipments, in form of logbooks or signed agreements" read Mr Mugambi's letter dated October 8.

The British firm now wants NIB officials held to account for failing to comply with the orders of the procurement review board and for contravening various tendering laws with wanton impunity.

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

"The tendering circus on this project is embarrassing the country and painting the government as corrupt in the eyes of foreign investors," the lawyer said.

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.