High Court clears way for construction of Sh14.4 billion Olkaria geothermal plant

High Court Judge Justice George Odunga. (PHOTO: FIDELIS KABUNYI)

The High Court on Monday cleared the way for construction of the Sh14.4 billion Olkaria geothermal plant after throwing out a case by one of the bidders seeking to block the project.

High Court Judge George Odunga dismissed the case filed by a consortium of bidders led by H Young and Co East Africa Ltd, contesting the the award of the lucrative deal to a rival consortium under the aegis of Shandong Kerui Petroleum Ltd.

The judge found that H Young did not give enough evidence to warrant the cancellation of the tender for the project that once completed will add 140 megawatts to the national grid.

Instead, Justice Odunga upheld the Public Procurement Administrative Review Board’s decision that the complaints were unmerited.

H Young had complained to the court that the board disregarded evidence that Kenya Generating Electricity Company (KenGen) had rejected Shandong’s bid on the grounds that its bank security was questionable.

H Young had  also provided a letter of intent from the same bank in its tender documents.

The firm argued that its rival signed the security on behalf of Industrial and Commercial Bank of China (ICBC).

H Young further argued that the bank would not have allowed any entity to sign the security on its behalf and that Shandong had allegedly forged its documents and should, thereofore, have been locked out of the bidding process

“In my view, there is no compelling reasons why I should interfere with the factual findings and without such interference its legal conclusions cannot be faulted,” ruled Justice Odunga.

The procurement review board overruled KenGen last year when the matter was brought before it, saying that it was unfair to Shandong as it instituted investigations on whether ICBC had given its power of attworney but waived the requirement for H Young.

The board said it found that Shandong had submitted all the relevant documents and also gave the lowest bid.

The court heard that the Chinese company had also proven that it had both the financial, personnel and machinery capacity to carry out the project. According to the board, H Young by filing the case in the court was not interested in challenging its decision but getting the tender “through the back door.”

H- Young, which is registered in Kenya, the court heard, did not meet the threshold set in the tender documents. KenGen had argued that it waived the requirement for the bank to sign the security documents.

KenGen had in the tender invited bids for the supply of engineering, procurement, construction and financing of geothermal power plants projects in Olkaria. Shandong in arguing its case said KenGen should have treated all bidders equally.

“The procuring entity decided to ignore the power of attorney in the applicant’s (H Young) documents and proceeded to discredit the authenticity of our power of attorney which they had resolved that it was not a mandatory for consideration of the bid,” said the firm.

“It is only fair and just that the procuring entity should have treated all bidders equally if it had waived the mandatory criteria for one bidder.”