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KenGen answers claims on faulted procurement rules on drilling contract

Great Wall Drilling rig on site in Kenya (source: cofek.co.ke)
Alexander Richter Alexander Richter 16 Jan 2012

The procurement of a drilling contract given to a Chinese drilling company still causes a stir in Kenya with KenGen now answering claims on it having faulted on procurement rules for the $90 million drillin contract.

Following some controversy in the fall of 2011 regarding a contract with Chinese drilling company Great Wall Drilling, KenGen is now answering new claims on it having faulted on procurement rules.

Kenya Electricity Generation denies claims that it faulted on procurement rules during the award of a Sh8 billion ($90 million) contract to the Chinese drilling company for drilling geothermal wells.

“In reference to information contained in a monthly magazine claiming that the board of directors and managing director Eddy Njoroge breached the rules to benefit from the deal, the company says none of the claims is true.

The article questioned the composition of the tender committee that awarded the extension of the Great Wall Drilling Company Contract, saying under the 2005 procurement rules, Mr Njoroge should not seat in the tender committee.

“The 54th KenGen Tender Committee meeting was legally constituted and acted in accordance with a transition provision of the Public Procurement and Disposal Act (2005) which came into force in 2006,” KenGen board chairman Titus Mbathi said.

The transition clause provided for continuity on all tendering processes that had started before the Act came into effect.

The Nairobi Law Monthly magazine has also accused KenGen of engaging in corruption in awarding a Sh8 billion tender for the commissioning of mobile wellheads to Norwegian company Green Energy Group.

Mr Mbathi said the contract extension of Great Wall Drilling Company, a Chinese firm, was within public procurement laws and did not amount to contract variation, as claimed by the magazine.

He said the tender was first floated in 2004 and only two firms applied, and were disqualified at the technical stage. The tender was re-advertised in 2006, after which over 240 firms, members of the International Association of Drilling Contractors (IADC), were invited to bid.

“Consequently, 12 companies bought the tender documents, but only three submitted bids. After thorough technical and financial appraisals, the Great Wall Drilling Company of China emerged as the most competitive,” Mr Mbathi said.

He further said that the initial tender was for six appraisal wells, but the tender and contract had an extension clause and this information was available to all tender applicants, “none of whom has to date complained of any malpractice throughout the execution of this tender”.

The following video was published by Kenyan TV station ntv with a press conference including the Chairman and CEO of KenGen:

Source: Sunday Nation