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Chinese firm floors Israelis to win Sh30 billion dam tender

By Nzau Musau | Dec 23rd 2017 | 3 min read

A Chinese consortium has bounced back at the helm of a controversial Sh30 billion mega dam project that is said to have caused divisions among top power brokers within the Jubilee administration.

The battle for construction of the dam in the archeological Gogo site in Lake Victoria basin was decided in favour of a Chinese group on Tuesday by the Public Procurement Administrative Review Board (PPARB).

An Israeli-powered joint venture of Baran International and Integrated Solutions Africa International Entrepreneurship (ISAIE) had challenged the National Irrigation Board’s (NIB) award of the contract to CGCOC Group Ltd on account of irregularities in the process.

The two companies – alongside another Chinese company, Sinohydro Corporation – had sailed through all stages of the tendering process before CGCOC Group was picked on combined strength of its technical and financial scores.

Baran and ISAIE however challenged the award on grounds that the Chinese firm failed to disclose the local taxes, duties, levies and other charges in its financial bid and therefore ought to have been disqualified as the lowest evaluated price.

They also argued that NIB contravened the legal provision that tender sums as submitted and read out during tender opening shall be absolute and final and shall not be subject of correction, adjustment or amendment in any way by any person or entity.

The NIB had admitted to arithmetical changes of the bids. The PPARB said its determination on Tuesday considered extraneous matters, which swayed the decision against the Israelis.

In the determination, the board agreed that the law required all bidders to separately set out the amounts of local taxes, duties, levies and other charges but also that any un-priced items shall be assumed to be included in the total costs of the bid.

Unpriced items

However and to the disappointment of the Chinese, the board said taxes, duties, levies and any other charges cannot be in the category of these “other un-priced items” since they are statutory and must be paid. The Israelis began to smile.

The Chinese through their lawyer Geoffrey Imende had argued that any failure to include the taxes separately in their Sh29 billion financial proposal was mitigated by their Sh30 billion inclusive of tax figure in the form of tender.

To them, what ought to bind the procuring entity in a tender process is the form of the tender and in the event of any contradiction in the figures set out in the form of the tender and any other document, the form of the tender takes precedence under the law.

The board agreed, as the smile on the face of the Israeli contractors and their lawyers Evelyn Njeri and Felix Ndolo began to wane.

“The successful bidder herein whose financial proposal was set out in the form of tender cannot therefore be faulted on the basis of omissions in the summary of costs but is bound by the price as set out in the form of tender,” the board said.

To further silence the Israelis, the board delved into the matter of costs and noted that the price difference between the Israelis and the Chinese was a whopping Sh15 billion.

The board argued that they had combined both financial and technical aspects in considering the award. Vouching on principle of prudent and economic use of public resources, the board stuck with the Chinese group: “The board cannot therefore simply ignore such a substantial price difference when faced with a request for review such as in one where the applicant has sought the reliefs sought in this case.”

Among their reliefs, the Israeli consortium had sought to be awarded the tender as the firm which had the “lowest responsive bid.” Both the Chinese and NIB had lodged preliminary objections which were dismissed by the board.

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