Kenya Pipeline and pump manufacturing company in court over tender feud

NAIROBI: The fate of the tender to supply pumps required to replace the old pipeline now lies with the High Court after Kenya Pipeline Company (KPC) and a dissatisfied bidder challenged each other on the tender awarding process.

Ruhpumpen Global Ltd accuses KPC Managing Director of flouting tender rules by trying to induce the main contractor to sub-contract Ebara Corporation.

“The MD, the second respondent, was hell bent to ensure that Ebara were awarded the sub-contract of supplying booster and mainline pumps and if it failed to abide by this wishes, it would cost them the contract,’’ Ruhpumpen argued in its papers. But on the other hand, the corporation blames the international company of not disclosing to the court that it was not in the list of firms that were per-qualified.

According to KPC’s legal officer Gloria Khafafa, the initial companies that tendered for the deal were six, but Ruhrpumpen, the applicant in the case was never in the list.

In response, Ms Khafafa told High Court Judge, Francis Gikonyo, that, “In any event such tendering process involving the applicant would be inconsequential and irrelevant as the applicant was never on the list of pre-qualified manufacturers.’’

A Lebanese-owned family company, Zakhem Ltd, won the tender to be the project’s main contractor. It was also agreed by both the company and KPC that they bring a list of manufacturers to supply submerged pumps, booster and main line pumps where the best contender would be given the sub-contract.

According to court documents filed by Ruhrpumpen, the company claimed that it placed the lowest bid compared to the other competitors for the KPC project. When the bids were opened, the court heard that Ruhrpumpen had placed $15.5 million bid, an equivalent of Sh1.4 billion, compared to Flowserve that had allegedly placed $22.5 million (Sh2.04 billion) and Ebara Corporation’s bid of $19.8 million (Sh1.8 billion).

Through its lawyer Stephen Kibunja, Ruhrpumpen told the court that Flowserve had opted out of the tendering process when it allegedly discovered its bid had been grossly overpriced. Ebara was said to have been asked to lower its bid price but it failed to do so.

The company claims that the fall of the two competitors left it as the sole company that would have sign the deal, but instead Ebara emerged the winner. He further argued that by KPC picking Ebara, the State stands to lose close to Sh390 million due to the price it quoted, a claim that was refuted by KPC.

“No loss of public funds will occur. The engagement between the first respondent and the second (KPC and Zakhem) is one fixed sum contract, which includes supply of pumps in issue. At no time is KPC required to pay additional payments,’’ Khafafa explained.

Ruhrpumpen wants the court to bar Zakheem from conducting or facilitating any evaluation or accepting any bid other than what it tendered for—supply of booster and mainline pumps. However, KPC claims that a delay to supply the pumps will lead to losses as the project would stall. The case will be heard on March 20.