Kenya Pipeline boss defends awarding of Sh43b contract to Zakhem as MPs seek more answers

Kenya Pipeline boss defends awarding of Sh43b contract to Zakhem as MPs seek more answers
KPC Managing Director Charles Kirui when he appeared before the Public Investment Committee Tuesday.

Nairobi, Kenya: The Kenya Pipeline Company (KPC) has defended its decision to award a Lebanese firm Sh43 billion a contract for the construction of a new pipeline.

KPC says it followed all the procurement laws and procedures in awarding Zakhem International Construction Limited the tender to construct the Mombasa-Nairobi pipeline since it scored the highest in the evaluation process.

KPC's Managing Director Charles Kirui Tuesday told the Public Investment Committee (PIC) that the award was above board, saying the Lebanese firm had the highest technical competence among the evaluated firms.

According to Kirui, Zakhem emerged top at 95.5 per cent after undertaking both the technical and financial evaluation, followed by China Petroleum Engineering and Construction Company at 89.1 per cent.

Chinese Sinotech Petroleum Services was rated third at 84.5 per cent and China Wu Yi fourth at 83.1 per cent.

Ms Denys NV was ranked fifth at 82 per cent, Ms Punji Lloyd sixth at 81.1 per cent while Saipem Business clinched 73.4 per cent. Although China Wu Yi was the lowest evaluated in the financial aspect, Kirui informed MPs that the firm lacked technical capacity after it jointly bid with another Chinese firm, Xiang Jing.

 "We were checking the technical capacity which includes the Curriculum Vitae of the personnel of the bidding firms and we found that China Wu YI did not have experience in handling oil and gas," he said.

However, Kiminini MP Chris Wamalwa differed with the MD, saying that in law, once two firms bid jointly, they should be treated as one. He wondered if KPC had deliberately failed to evaluate Xiang Jing to pave way for Zhakem.

But Kirui insisted Zakhem had met the competence required, with an advantage of having constructed the same pipeline in 1972; which has now lasted for 36 years from the initial plan of 25 years.

The MPs also demanded to know why KPC had rushed to award the contract on the same day that the financial bids were opened. Earlier, the MD had told the committee that the financial bids were opened on June 3 and after combing both the financial and technical evaluation reports, they resolved to award the tender on the same day.

The MPs are also seeking answers from KPC as to whether they did a due diligence on Zakhem following reports that the same firm had been blacklisted in Nigeria, Liberia and Ghana. PIC also wants Kirui to clarify if they had broken their own tender rules by accepting a bid bond by Zakhem issued by Ecobank Nigeria, in spite of their requirement of a bond from a bank operating in the country.

PIC Chairman Adan Keynan ordered the MD to furnish the committee with all the tender documents and any other proceedings that have followed the award of the tender in one week, with Kirui set to return to Parliament in two weeks.

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