Kenya Power faces Sh196 million suit for cancelling poles tender

The woes facing Kenya Power seem to be far from over after a company sued it for nearly Sh200 million in compensation following the cancellation of a Sh410 million tender to supply 29,500 wooden poles.

Inter Tropical Timber Trading Company Ltd says Kenya Power illegally cancelled the tender after its managers were influenced by shadowy people for selfish reasons.

The company was awarded the tender on June 11, 2012 and it proceeded to take loans in four local banks with an aim of meeting the contractual obligations spelt out in the tender.

The poles were to be supplied to Ukunda and Voi, but in July 2013 the company was asked to change the delivery to Nyeri which it did.

The company said it received an email from Kenya Power asking it to suspend supply for what was termed as “over supply” and a communication was promised on when to resume deliveries.

CONTRACT EXPIRED

“Inter Tropical Timber Trading Company received with utter shock a letter dated January 24, 2017 purporting to indicate that its contract with Kenya Power had since expired and that all its active Local Purchase Orders (LPOs) under the said contract had been cancelled and no more deliveries will be accepted,” reads the court documents filed at High Court’s Commercial and Tax Division in Nairobi.

The company director Geoffrey Kariuki, in his witness statement, says the letter indicated that the reasons for the cancellation was that it was yet to supply 12,865 poles.

However, in the same letter Kenya Power admits the delay in supply was caused by the parastatal for stating there was congestion in its receiving centres, says Mr Kariuki.

The company now says Kenya Power senior managers tried to, informally, use delay tactics in explaining the real reasons for cancellation of the tender in a bid to ensure the case was not challenged in court.

UNDUE INFLUENCE

“Inter Tropical Timber Trading Company Ltd has reliably learnt that the aforesaid actions were caused by undue influence and interference with Kenya Power operations by cartel individuals being the officials of a self-serving entity by the name Kenya Wood Preservers Association (KWPA),” says Mr Kariuki.

The court documents state that the association has infiltrated Kenya Power’s procurement department where they “unlawfully and illegally dictate which suppliers are to be allocated which tender, at what price and for which regions to supply the poles”.

The company now seeks a compensation of Sh57.9 million for lost profits for poles not delivered and Sh138 million for the unserviced loan facilities.

Kenya Power is yet to file its reply for the suit that was lodged in court on July 13.