Storm over Sh30bn Lowaat dam project tender

Sunday June 17 2018

 Katilu Irrigation Scheme in Turkana South,

An excavator unblocks a canal at Katilu Irrigation Scheme in Turkana South, Turkana County, which is under the National Irrigation Board. PHOTO | JARED NYATAYA | NATION MEDIA GROUP 

DAVID MWERE
By DAVID MWERE
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The National Irrigation Board is once again on the spot over a Sh30 billion questionable procurement process in the construction of a dam in Turkana County.

The latest scandal to hit NIB comes after the Public Procurement Administrative Review Board (PPARB) annulled a tender it had awarded a consortium of companies and directed that it conducts a fresh evaluation for the construction of Lowaat dam.

The fresh evaluation and the award, according to PPARB, must be done within seven days from June 11, when the ruling was made, owing to the urgency and public importance involved in the multi-billion-shilling project.

The fresh evaluation will only involve the applicant and the successful bidders’ bids using the evaluation and the award criteria set out in the tender document and on the basis of the sums set out in the respective bidders’ forms of the tender.

NIB has also been ordered to file an evaluation report and letters of notification with the board to confirm compliance with the orders, a matter that has seen MPs mull over summoning the management of the irrigation board over the tender irregularities.

IRRIGATION BOARD
The irrigation board had in 2016 awarded the Sh29.99 billion tender for Lowaat dam to Sinotec Company Limited and others.

But China International Water Electric Corp (CWE) which had bid the project for Sh18 billion, appealed the decision at the review board chaired by Mr Paul Gacheru, arguing that the irrigation board had violated the Public Procurement and Disposal Act by falsifying its bid papers.

“Owing to the urgency and the public importance involved in this project, NIB is directed to complete the evaluation and the award process within seven days from the date of the ruling,” Mr Gacheru said.
The board has also extended the tender and the tender security validity periods for 30 days to enable NIB to complete the process

The other board members are Ms Rosemary Gituma, Mr Hussein Were, Mr Nelson Orgut and Mr Paul Ngotho.

TENDER DOCUMENTS

According to the tender documents, three companies - CWE, Sinotec and others, and Cooperative Muratori and Cementisti-CMC Di Ravenna -- had passed both the technical and financial evaluations.

CWE quoted the lowest bid at Sh17.99 billion, followed by Sinotec Company and others at Sh29.99 and Cooperative Muratori at Sh35 billion.

Ordinarily, CWE should have been awarded the tender, having scored well in technical and financial evaluations.

But in its own wisdom, the irrigation board chose to award the project to the second highest bidder with a difference of over Sh11 billion, which is against the Public Procurement and Disposal Act.

The law provides that the bidder who presents the lowest bid, after passing technical and financial evaluation, should be awarded the tender.

Interestingly, the irrigation board is under a series of investigations by the Directorate of Criminal Investigations (DCI) and the Ethics and Anti-Corruption Commission (EACC) over irregular tendering processes.

NIB is undertaking the construction of dams across the country but it now appears that many of these projects could be mired in procurement irregularities.

PROCUREMENT IRREGULARITIES

The irrigation board has been accused of falsifying the CWE’s tender documents to irregularly award the tender to Sinotec Company and others.

According to Mr Gacheru, upon perusing the forms of the tender submitted by the procuring entity (NIB) and successful bidder (Sinotec Company and others) to the review board, it was found that the price quoted by CWE was Sh17.99 billion.

That of the successful bidder was Sh29.9 billion. However, instead of evaluating the two tenders on the basis of the above prices, the procuring entity - in what it termed as a correction of errors - falsified the records to show that CWE had quoted Sh29.07 billion.

“The board is of the respectful view that by purporting to change the prices set out in the form of the tender and instead use different prices at the financial evaluation stage, the procuring entity breached the provisions of section 82 of the Act,” Mr Gacheru ruled.

The law prohibits a procuring entity, in this case, NIB, from changing the prices set out in the form of tender.

This means that the tender sum as submitted and read out during the tender opening shall be absolute.

MONETARY STUDIES
The review board has on several times held that the form of tender reigns supreme in matters relating to price.

Previous cases where the board has ruled in a similar manner include Surestep Systems and Solutions Limited vs Industrial and Commercial Development Corporation and Bevaj Furniture vs Kenya School of
A more recent case is that of Joint Venture of Baran International and Integrated Solutions Africa International Entrepreneurship vs National Irrigation Board.

The board also noted that during the technical evaluation process, each evaluator did not assign his or her individual score of each item set out under the technical evaluation criteria as provided for in the tender document.

It is a requirement that where a tender evaluation committee sits to evaluate a tender, each individual member of the committee must give a score and state the reasons and the basis for arriving at the score to avoid arbitrariness.

“Where a procuring entity’s tender committee fails to do so, then it renders the entire process vague and deprives it of the necessary transparency as envisaged by the law and it may lead to manipulation of the technical scores,” Mr Gacheru said.

Upon the end of seven days, NIB shall file an evaluation report and letters of notification with the board to confirm compliance with the orders .