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New bid to bar disputed SGR diesel contract fails
A new train at the Nairobi terminus on May 29, 2017.
An application by TotalEnergies seeking to block the award of multi-billion contracts to supply diesel to keep passenger and cargo locomotives running on the standard gauge railway(SGR) for a year has failed, just a week after another unsuccessful attempt by oil marketer Vivo Energy Kenya.
Dalbit Petroleum Limited and Galana Oil Kenya Limited were awarded multi-billion shilling deals to collectively supply 38 million litres of diesel for trains on the SGR amid protests by TotalEnergies and Vivo Energy.
The tender committee at Kenya Railways Corporation recommended that Dalbit be awarded a contract to supply automotive diesel to its Mombasa Port Reitz depot at prices set by the Energy and Petroleum Regulatory Authority (Epra) at a discounted rate of Sh5.
Galana was endorsed for a deal to supply fuel to the Nairobi SGR depot at the prevailing Epra prices at a discount rate of Sh1.12.
The tender for the mega fuel supply contract was floated in March this year and attracted eight bids by top oil marketers including Galana, Dalbit, Rubis Energy Kenya, Hass Petroleum, Trinity Energy Kenya Limited, and Total Energies Marketing Kenya Plc. Other bidders were Vivo Energy Kenya and One Petroleum Limited.
Only three bidders made it past the preliminary tender evaluation stage, drawing protests by Vivo and Total which unsuccessfully pushed for separate reviews of the tender decision.
In an application to the Public Procurement Administrative Review Board (PPARB), Vivo claimed it was unfairly locked out for minor inconsistency in the pagination of its bid and failing to provide a quality assurance certificate by the Kenya Pipeline Company yet it wasn’t a requirement in the bid papers.
The board, however, said the mix-up in pagination in the tender document was grave and went against the tender requirements for a chronological flow of documents, adding that Vivo was also in breach of the bid requirements when it presented a KPC quality assurance certificate dated February 19, 2021 which did not align with a required that the document covers the 2022/2023 period.
TotalEnergies claimed it was unfairly dismissed for minor omissions, including allegedly failing to prove the authenticity of agreement documents to confirm the ownership and proprietorship detail relating to its vehicles and distribution facilities.
It is not clear whether or not the two companies will escalate the fight to court.
Going by the current Sh179.67 retail price of diesel in Nairobi, it means the two firms will jointly service supplies worth more than Sh6.8 billion.
