The High Court has dismissed a suit that sought to block Kenya Power from buying over 700,000 meters worth Sh5.4 billion, enabling thousands of homes to connect to power and aiding the utility firm to root out electricity thieves who use illegal connections.
Justice Jairus Ngaah ruled that Kenya Power cannot be faulted for restricting the tender to local manufacturers and assemblers in its quest to promote domestic entrepreneurs.
Niavana Agencies Limited, a local company, had challenged the tender, arguing that the restriction of the bidders to local meter manufacturers or assemblers excluded citizen contractors, a procurement lingo for individuals or firms fully owned or controlled by Kenyans.
The freeze of the tender, which was advertised a year ago, hit over a half a million customers who were seeking new meters and replacements for faulty or stolen ones.
This upped illegal connections to the national grid, depriving the company of revenue amid a steep earnings slump.
The judge said it wasn’t true that citizen contractors were blocked from participating in the tender as they could do so if they were registered in Kenya, were operating in the country and their goods and services were manufactured in Kenya.
“I am not satisfied that a case has been made out, on the face of these documents, to persuade me to exercise my discretion in favour of the applicant and grant any of the orders of judicial review sought. Its application is hereby dismissed with costs,” said the judge.
This means that Niavana Agencies Limited and its managing director Benedict Ndung’u will pay millions of shillings for legal fees incurred by Kenya Power and the Public Procurement Administrative Review Board (PPRB).
Kenya Power termed Mr Ndung’u a serial complainant of Kenya Power tenders, terming him a vexatious litigant, or one driven by the need to cause harassment, frustration and financial costs to owners of tenders.
The PPRB dismissed the case early this year, forcing Mr Ndung’u to head to the High Court.
He sued Kenya Power over two other tenders. Niavana Agencies through Mr Ndungu said Kenya Power floated the tender in November last year for the supply of single phase and three-phase smart meters.
He said the tender document was subsequently amended twice, making the procurement unlawful and irregular. Mr Ndung’u said Kenya Power curtailed competition and fairness by prescribing non-existent preference and reservation schemes.
The company defended the process and the extension of the tender deadline on two occasions to allow for amendments.
Kenya Power said the tender was open to all local manufacturers or assemblers based in Kenya and the restriction sought to promote local industries.
The court was informed that 10 bidders expressed their interest to participate in the tender but only eight firms submitted their bid documents by the closing date on December 1, 2023.
Kenya Power said Niavana Agencies was not among the bidders and that it made clarifications and corrected clerical errors in respect of the principal tender document through two addenda.
The firm said there was no material alteration to the substance of the tender through the addenda except for general clarifications and corrected clerical errors on issues raised by the bidders and answered in accordance with section 75 of the Act.
This has affected not only households and businesses but also some key installations such as health facilities and schools.
Kenya Power has attributed the shortage to protracted court battles over multibillion-shilling tenders for the supply of meters.
“This backlog is growing by the day and translates to enormous injury to the public interest of consumers who required the meters and to the daily losses incurred by the respondent,” said Kenya Power in court documents.
While dismissing the suit, the judge noted that the requirements of the tender document reserving the contract to local manufacturers and assemblers was a preserve of Kenya Power and it was meant to encourage competition among tenderers who were qualified and eligible in the tendering process.
Kenya Power said the tender was restricted to local manufacturers and assemblers to promote local businesses and had been accounted for in its annual procurement plan and budget.
Kenya Power’s net profit for the first half to the end of December stood at Sh319 million compared to a loss of Sh1.15 billion in a similar period a year earlier.
The power distributor’s revenue from electricity sales increased by 31.3 per cent from Sh86.67 billion to Sh113.55 billion, coming in the period the utility firm said it connected 225,000 new customers to the grid, surpassing its target by 13.87 per cent.
