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Tribunal backs Centum consortium's Sh170b coal power plant tender win

By Standard Reporter and Reuters | Published Fri, January 16th 2015 at 00:00, Updated January 15th 2015 at 20:21 GMT +3
A worker walks at a power plant of an oil processing facility. Centum is gearing up to build a coal power plant in Lamu County.

NAIROBI: Centum Investment will start building a coal power plant after a challenge for the award of the tender by a rival bidder was rejected by a tribunal. Centum, which won the tender to build the 1,000 megawatt plant in the coastal county of Lamu last September, entered a consortium with Gulf Energy to present the winning bid.

However, the award of the tender was challenged by a rival consortium, HCIG-Liketh, before a Government committee.

A tribunal ruled in favour of the Centum-Gulf Energy consortium this week, Centum said in a statement seen by Reuters on Thursday.

“We will now work hard to recover the time lost since the award of the tender,” Centum Chief Executive James Mworia said.

The coal-fired power plant, which Centum says will generate close to half of Kenya’s electricity capacity when completed, will be funded by equity of about $450 million, with the balance of $1.35 billion coming from debt.

Centum’s shares have surged more than 10 per cent this week to a high of Sh72 as investors welcomed news of the resolution of the row over the tender. Centum Investment on Tuesday got the green light to sign a Sh170 billion contract with the government to construct a coal power plant in Lamu. This followed the dismissal of a petition filed by one of the losing bidders in the tendering process.

The Public Private Partnership’s Petition Committee threw out an appeal filed by Hebei Construction Investment Group and Liketh Investments consortium, maintaining that there was no foul play in the tender evaluation process. HCIG-Liketh had in its petition questioned why Gulf Energy was allowed to join the Centum consortium despite being knocked out of the preliminary evaluation stages, contrary to procurement laws. The consortium had also claimed it was unfairly evaluated and wanted a review of the process.

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The committee, however, ruled that there is no provision in the Public Private Partnership Act that bars a bidder from replacing a member of its consortium.

WORK HARD

Reacting to the news of the ruling, Mworia said, “We are pleased that the PPP Petition Committee has heard and determined the petition and ruled in favour of the Centum-Gulf Energy Consortium.”

“As a consortium, we will now work hard to recover the time lost since the award of the tender to the consortium in September 2014 and look forward to delivering affordable and cheaper power to Kenyans,” he said.

“We would also want to take this opportunity to reiterate that our consortium has the necessary capacity to deliver this ambitious project, the single largest public-private partnership in this region.” Mr Mworia further noted that the delivery of the coal power project would be a catalyst for Kenya’s economic growth and successful industrialisation by enhancing the country’s competitiveness.

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