Procurement watchdog flags fresh Kenya Power meters tender

The sole electricity distributor, Kenya Power, is in hot water over the award of a Sh5.4 billion tender for the supply of meters.

The Public Procurement Regulatory Authority wants Kenya Power to explain how a company that is yet to deliver meters ordered in 2020 was included in a recent tender to procure thousands of smart meters.

The Public Procurement Regulatory Authority (PPRA), in a letter to Kenya Power managing director Joseph Siror, said Smart Meters Technology Ltd has an order for 91,000 meters that was due on 24 July 2020, but none has allegedly been delivered, according to an order report submitted for verification.

The company was one of the four local firms that won the Sh5.4 billion tender to supply 711,740 metres.

"Based on the Tender Data Sheet ITT 3.7 (2) and ITT 40 (20 (c), bidders with more than 50 per cent outstanding KPLC orders were not eligible for the tender and the award was to take into consideration timely delivery schedules and satisfactory performance of at least 50 per cent delivery on previous orders," said Patrick Wanjuki, the PPRA director general in the latter.

Mr Wanjuki made the comments in a complaint to the board by Benedict Kabugi over alleged breaches in the tender process.

Other companies that won the tender are Inhemeter Africa Company Ltd, Yocan Group Ltd and Magnate Ventures Ltd.

"In view of the foregoing, you are requested to provide further responses to the above observations, taking into account the financial implications in relation to the award criteria applied by your company, to enable us to conclude our review," Mr Wanjuki added.

The committee said KPLC should respond by 4 October.

Smart Meter Technology Ltd was awarded two lots, one for Sh1.6 billion and another for Sh687 million.

The regulator also pointed out that KPLC could have saved costs by grouping the items into lots and using the lowest evaluated bidder per lot as the award criteria.

The watchdog also questioned how KPLC decided to procure meters for two financial years under one annual procurement plan and one annual financial budget.

"However, a review of your procurement plan does not show whether the subject procurement was planned as a multi-year procurement as required by section 53 of the Act. Therefore, the justification given for planning to procure meters for two financial years under an annual procurement plan and a one-year financial budget is contrary to the provisions of the Procurement Act," the letter said.

The power utility had defended itself by saying that by the end of April this year, there was a backlog of 50,000 meters for new connections and replacements, and that the backlog was growing by the day.

According to KPLC, the 50,000 meters are needed by critical and essential service providers such as hospitals, health centres, dispensaries and schools, government institutions, domestic consumers and businesses, among others, who have paid for the meters.

Mr Kabugi challenged the tender, saying the power utility had irregularly and illegally restricted the tender to local installers.

He said the tender documents issued to interested bidders after the tender was advertised in February stated that the eligibility criteria was only for local manufacturing companies.

Mr Kabugi said the criteria was allegedly opened up to include local meter assemblers and not manufacturers through six addenda, which he said substantially changed the original tender document and eligibility criteria.

"In addition, the amounts awarded exceeded the allocated budget and the excess amounts were never approved by the board, nor was the procurement plan amended to accommodate the excess amounts, in contravention of Section 53(2) and (8) of the Act," Mr Kabugi said.