Kenya to ban Chinese firm over geothermal wells tender fraud

Geothermal well

A geothermal well in Silali, Baringo County. 

Photo credit: File | Nation Media Group

What you need to know:

  • The firm forged a performance bond to land lucrative well drilling contract in Baringo.

A Chinese firm is set to be banned from State tenders in Kenya for falsifying a bank document to secure a multibillion-shilling contract to drill geothermal wells in Baringo.

The Ethics and Anti-Corruption Commission (EACC) said investigations established that Hong Kong Offshore Oilfield Supply and Logistics (HOOSL) forged a $5.85 million (Sh667 million) performance bond from the Industrial and Commercial Bank of China to secure the contract to drill up to 20 wells for the State-run Geothermal Development Company (GDC). A performance bond is usually provided by a bank or an insurance firm to ensure a contractor completes a given task.

The altered performance bond was detected by the GDC officers who then notified the Directorate of Criminal Investigations for action. The EACC was also called in to review claims of malpractices in the whole tender process but no other irregularities were found.

File closed

On November 23, 2021, the EACC forwarded a report to the Director of Public Prosecutions (DPP) Noordin Haji recommending that the Chinese firm is debarred by the Public Procurement Regulatory Authority (PPRA) and the investigation file closed.

“On January 25, 2022, the DPP returned the inquiry file with recommendations for administrative action,” the EACC disclosed in a new report on Friday.

Documents showed that HOOSL had already been paid an advance of $14.62 million (Sh1.67 billion), which constituted 25 per cent of the contract sum as provided for by the deal signed with the GDC. It later refunded the amount in full after it failed to mobilise enough kits to carry out the drilling job.

In December another Chinese firm, Weihai Construction Group, was banned by the African Development Bank (AfDB) over fraud in three multi-billion-shilling infrastructure projects it was handling in Kenya.

Nairobi River

An inquiry by the AfDB’s Office of Integrity and Anti-Corruption established that Weihai Construction Group engaged in fraud in the Kenol-Sagana-Marua Highway improvement project, the second phase of the Nairobi River basin rehabilitation and restoration programme project, and the Towns Sustainable Water Supply and Sanitation Programme.

The firm was banned from AfDB-funded programmes and projects for 35 months, effective November 19, 2021.


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