KTDA embroiled in fertiliser tender row

The Kenya Tea Development Agency (KTDA) is embroiled in a multi-million-shilling tender war that could derail the supply of fertiliser to more than 650,000 smallholder tea farmers across the country.

In a matter certified as urgent, the KTDA is accused of failing to comply with constitutional provisions on the procurement of goods and services in the supply of 92,290 tonnes of NPK 26:5:5 fertiliser.

The fertiliser row puts the spotlight on the David Ichoho-led board, which was elected to reform the smallholder sector after the previous board was dismissed on allegations of corruption and mismanagement.

The KTDA is accused of awarding the fertiliser tender to a company that will cost the agency over Sh8 million more to supply the commodity.

A court has barred KTDA from entering into a contract with any manufacturing company until the case is resolved.  

Arguing on behalf of SLDR International Ltd, Mr Bernard Mugisha said they submitted the lowest bid for the supply of the fertiliser and were given the go-ahead to submit financial bids for the supply of the fertiliser by April 17, which they did.

KTDA then went ahead with the first financial opening and a company called NutriSource Pte, which was supporting Uralchem, was declared the lowest bidder in the presence of all the bidders and was expected to be issued a letter of intent and awarded the contract after due diligence.

However, on May 9, the Tea Board asked SLDR International Ltd and other bidders to re-submit a revised financial offer with a discounted price for the NPK fertiliser — a request he says was made without any valid explanation.

"In compliance with the said request, we resubmitted the discounted financial proposals as requested and emerged as the lowest bidder ... having submitted a lowest evaluated financial bid, we had a legitimate expectation that we would be determined as the successful bidder and awarded the tender in accordance with the procurement laws and procedures," he said.

According to Mr Mugisha, despite having the lowest financial bid, KTDA awarded the tender for the supply of the fertiliser to Multicommerce FCZ Ltd, which was the second lowest bidder with a price of USD37,326.642.60, which translates to to Sh54,753.6 (USD402.60) per tonne, a difference of USD602,790.50, which translates to Sh84,390,670.

"As such, there is no value for money," he added.

In court documents seen by Nation, Mr Mugisha stated that on June 7, KTDA Chairman David Ichoho and general manager operations Daniel Kanja instructed the tea board's management to issue an award letter to MultiCommerce FCZ Ltd, the second lowest bidder.

Foreign tender

He said Mr Ichoho and Mr Kanja introduced non-existent and foreign tender conditions and terms that were not part of the pre-qualification and financial evaluation.

KTDA stated that it had disqualified the lowest bidder - SLDR International — because it had changed its manufacturer from BKM LLC to JSC Uralchem KCKK Branch, contrary to the tender conditions.

According to Mr Mugisha, the condition imposed stated that bidders could not change their manufacturer from the one nominated in the pre-qualification stage.

"The condition used to unfairly and unjustifiably disqualify us despite submitting the lowest evaluated bid was not a condition of the tender ... it was introduced by the chairman and general director to exclude our bid," he said, adding that KTDA was informed in the revised financial offer submitted that the tender would be subcontracted to JSC Uralchem KCKK Branch.

SLDR International Ltd argued that the above reason was "unjustified, unreasonable and discriminatory" because Multicommerce FCZ Ltd was awarded the contract despite also changing the manufacturer from Acron to JSC Minudobreniya.

Mr Mugisha also argued that KTDA awarded the tender to the manufacturer that would take longer to deliver the fertiliser, overlooking them despite the fact that they had demonstrated that they could produce 2,500 tonnes per day and deliver within four to six weeks, unlike their competitor who had indicated a capacity of 1,800 tonnes per day and a delivery period of six weeks.

"KTDA's action in imposing a non-existent condition in favour of our competitor is discriminatory, unfair, unjustifiable, unreasonable and contrary to the general principles of procurement of goods and services," he said.

"As this is an open international tender, the tender requirements must be in accordance with the procurement principles of fairness, equality, non-discrimination, competition and giving opportunities to local suppliers and assemblers without any favouritism," he added.
Pending the determination of the case, the court has issued interim orders restraining KTDA and Multi Commerse FCZ Ltd from entering into any agreement and freezing any contract entered into between them.

It also restrained KTDA and Multi Commerce FCZ Ltd from opening letters of credit, approving samples, authorising or approving the production, packaging and supply of NPK 26:5:5.

[email protected]