A multi-million shilling solar plant initiative could save the struggling East African Portland Cement hundreds of millions in power bills.
A multi-million shilling solar plant tender is at the centre of a lengthy legal battle that continues to derail a key project for East African Portland Cement (EAPC), leaving uncertain the fate of an initiative that could save the struggling cement maker hundreds of millions in power bills.
At the heart of the fight are two companies vying for the tender valued at Sh573 million, and the EAPC management which seems determined to award the job to one of the firms, a finding by the Public Procurement and Administrative Review Board (PPARB) established last month.
It started when Central Electricals International Limited, through its head of marketing and tendering Mohamed Taki, moved before the board on September 25 last year requesting a review of the process after EAPC awarded it to Spenomatic Kenya Limited.
The cement manufacturer, after advertising an expression of interest for development of captive solar unit in November 2022 and subsequently opening the tender in May 2023, decided that only Spenomatic Kenya out of five companies, which submitted bids passed beyond the tender’s technical evaluation stage and went ahead to award it on September 11.
But Central Electricals International moved before the PPARB on September 25 complaining that scores entered by EAPC’s tender evaluation committee were wrong and asked the board to review them and award it the tender.
On October 16 last year, the board issued orders nullifying and setting aside EAPC’s decision awarding Spenomatic Kenya the tender as it also ordered the firm’s managing director to direct the company’s evaluation committee to admit all bids that passed preliminary evaluation stage for re-evaluation at the technical stage.
The team would later proceed on a two-week re-evaluation exercise that would interestingly end up giving Spenomatic Kenya the same job again, at a price of Sh572,790,267 on October 30. The EAPC’s evaluation committee decided that only the company made the cut to financial evaluation.
A section of the East African Portland Cement Company plant in Athi River on January 25, 2023.
“According to the minutes of the tender re-evaluation of the subject tender’s held on October 25 and 26, 2023 and signed by members of the evaluation committee on October 26, 2023, at the end of evaluation at this stage, only the interested party (Spenomatic Kenya) tender had met the pass mark of 80 per cent in the evaluation by scoring 88.76 per cent and was determined responsive and thus proceeded for evaluation at the evaluation of the financial proposal,” the PPARB documents show.
The papers note that at the financial evaluation, the committee recommended award of the tender to Spenomatic Kenya, a decision affirmed by EAPC’s head of supply chain, Mr Moses Sudi, on October 27.
But after the award to Spenomatic Kenya, Central Electricals International moved before the PPARB on November 10 with yet another request for review, which has now exposed possible flaws at the EAPC’s procurement system, that could stall the key project even longer.
“It is the applicant’s (Central Electricals International) case that the respondents proceeded to re-evaluate the entire tender and unfairly denied the applicant full marks earned by failing to adhere to the criteria set out, did not disclose the marks scored by the applicant as it declared the applicant unsuccessful and it was out of malice and bias that they failed to disclose the scores garnered by the applicant in a bid to secure a predetermined selection of the interested party (Spenomatic Kenya),” the PPARB documents reveal.
Central Electricals further complained before the board that EAPC’s tender evaluation committee, during the technical re-evaluation ordered by the PPARB, reduced its score by from the initial 77.8 per cent to 62.24 per cent, and cited different reasons for the company’s failure to progress past technical evaluation, claiming bias and a predetermination to award the tender to Spenomatic.
Technical evaluation assesses a tenderer’s capacity and ability to undertake a project.
But the EAPC told the board that Central Electricals failed to meet key requirements, including proof of having completed three similar projects in Kenya before and discrepancies in documents presented as proof.
“While the applicant had submitted the Kimilili project as part of the three local projects done, the purchase order submitted was in the letterhead of Sentimental Energy while the handing over certificate was in the name of Sentimental Energy and IcFEM Dreamland Hospital Kimilili. As such it was unclear as to the exact role of the applicant with regard to this particular project,” EAPC said in its response.
A signpost near the entrance to the East African Portland Cement Company factory in Athi River.
The procurement board differed with the EAPC and Spenomatic Kenya (which the EAPC had awarded the tender twice), agreeing with Central Electricals International and ordering the EAPC to yet again re-admit its tender.
“The board also satisfied itself in its decision dated October 16, 2023 in request for review No. 65 of 2023 that the applicant had demonstrated experience in successful implementation of three similar solar PV contracts in Kenya by virtue of the proof of projects done in Kenya for Two Rivers Power Company Limited, IcFem Dreamland Hospital, Kimilili, and Kitugum/Lorgum Hospital,” the PPARB decided.
The PPARB faulted EAPC for providing varied reasons for failing Central Electricals International during the two technical evaluations done during the procurement and reducing its score at the technical re-evaluation.
“From the foregoing, and in view of the orders issued by the board in the decision dated October 16, 2023, it is our considered view that the respondents (EAPC) failed to score the applicant accordingly as provided for in the tender document where the applicant had met the stipulated requirements, noting that the scoring provided was for maximum marks that a tenderer could score and did not limit issuance of scores below the set maximum scores,” said the PPARB.
It ruled that Central Electricals International passed technical evaluation for the tender and ought to have been considered for financial evaluation, where the key determinant for the tender winner would be the tender price all successful bidders submitted.
“In the circumstances, we find that the evaluation committee failed to evaluate the applicant’s tender in accordance with the criteria provided for evaluation of technical proposal of section iii- evaluation and qualification criteria of the tender document read with section 80(2) of the Act and Article 227(1) of the constitution and in doing so failed to comply with the orders of the board issued on October 16, 2023. Accordingly, the applicant’s tender is reinstated back and the procuring entity directed to carry out a technical and financial evaluation of the Applicant’s bid since the grounds for its being declared as non-responsive are not valid,” the PPARB ruled last month.
The board nullified EAPC’s October 30 letter declaring Spenomatic Kenya winner for the Sh572 million tender and ordered EAPCs MD to direct the evaluation committee to re-admit Central Electricals International’s tender
“The letter of notification of award issued to the interested party dated October 30, 2023 with respect to RFP No. EAPCPLC/RFP/009/2023 for design, supply, installation and commissioning of a grid tied solar PV Plant, be and is hereby nullified and set aside,” the PPARB ordered on December 1.
