Chinese firm blames its lawyers for losing pipeline tender appeal

Thika Road Superhighway interchange. The road was built by Chinese firm China Wu Yi.

Kenya: Chinese firm that lost the tender to construct a multi-billion pipeline contract is now turning the heat on its lawyers for holding confidential documents that partly led to the dismissal of an appeal it had made at Public Procurement Administrative and Review Board.

According to documents in our possession, China Wu Yi has accuses its lawyers of  presenting to the Board documents which might have led to the collapse of their case. Specifically, China Wu Yi says it was not aware that the law firm was in possession of the documents and would not have sanctioned their use before the board.

“We are extremely disappointed with the way that you conducted our KPC appeal at the Public Procurement Administrative and Review Board,” said Liu Hui managing director China Wu Yi, Kenya Branch in a letter to the law firm dated July 2.

“You prepared a reply to the Kenya Pipeline’s response and proceeded to file and serve it without according us the opportunity to see the reply,” he said in the letter.

“Secondly, you proceeded to include in your said reply, documents that were of confidential in nature, whose sources you could not explain.” The documents detailing how Kenya Pipeline Company had made its decision to award the Zakhem International the contract.

But the lawyers denied any wrong doing. In their response to the letter by China Wu Yi, S.O. Owino and Associates said it had received the confidential information from the company’s agents.

Dismissed the appeal

“We shall not indulge in blame games. Suffice to say that the said documents were forwarded to us by your agents, particulars whereof you are well aware. Please find enclosed herewith the decision of the Board. We are of the opinion that you should challenge the said decision in the High court,” said the law firm in a letter to China Wu Yi dated Thursday July 3.

The firm had sought to stop the signing of a contract between KPC and Zakhem International for the building of the new pipeline between Mombasa and Nairobi.

It had argued that irregularities during the tender process as well as an unfair evaluation criteria by KPC saw it lose out to the Lebanon-based Zakhem International. The Procurement Review Board, however, dismissed the appeal and gave KPC the go-ahead to sign the contract and at the same time accused China Wu Yi of accessing confidential documents belonging to KPC. China Wu Yi had bid to build the bout 500-kilometre oil pipeline between Mombasa and Nairobi. Zakhem, according to evaluation by KPC, had the highest technical and financial score of 95.5 per cent. It had had bid to do the job for Sh42 billion ($484.5 million).

The Chinese firm was the lowest bidder with a financial bid of Sh39 billion ($456.8 billion), but was beaten at the technical evaluation level and received a combined  technical and financial score of 83.1 per cent. China Wu Yi was dissatisfied with KPC’s decision.

The new pipeline is expected to replace the 40-year-old one in place that is susceptible to major breakdowns. These frequent breakdowns usually have dire effects on Kenya’s as well as regional petroleum supply situation.