Centum, Gulf Energy secure Lamu coal project

September 1, 2014
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Gulf and Centum’s consortium was among three pre-qualified final bidders who submitted final proposals/FILE
Gulf and Centum’s consortium was among three pre-qualified final bidders who submitted final proposals/FILE

, NAIROBI, Kenya, Sep 1 – A consortium led by Kenyan companies Gulf Energy Limited and Centum Investment Company Limited, has emerged as the winning bidder for the development of the 960 Megawatt Lamu coal plant.

Gulf & Centum’s consortium was among three pre-qualified final bidders who submitted final proposals which were then subjected to a rigorous technical and financial evaluation by an independent Technical Evaluation Committee.

The Gulf & Centum consortium emerged winners from an initial 26 bidders that included large multinational players from India, Japan, the USA and Europe.

“The award is a major vote of confidence for the capacity of reputable local companies to lead, fund and own the development of large infrastructure projects within the country in partnership with experienced world class companies,” Centum CEO James Mworia said in a statement.

Others in the Gulf & Centum consortium are Sichuan Electric Power Design and Consulting Company Limited (SEDC), Sichuan No. 3 Power Construction Company (SEPCC), both subsidiaries of Chinese energy giant, PowerChina and China Huadian Corporation Power Operation Company (CHD).

“Our consortium includes two wholly owned subsidiaries of PowerChina, which is a Fortune 500 company with vast experience in power project development having installed capacity in excess of 43,000MW worldwide in nuclear, coal, thermal and hydro including the Three Gorges Dam which is the world’s largest hydro-power dam,” Mworia added.

The other two consortiums include Shanghai Electric Company and Avic International and Cistenique, and HCIG Energy Investments Company which had planned to work with Liketh Investments Company.

The announcement comes after the just concluded forum by the Ministry of Energy on the updates of the evaluation process of the three final bidders.

“I think when it comes to the announcement of the winner of the bidding process, it is really a communication between the bidder and the contracting authority; even those who do not win will also be communicated to. We are going to finish this process as soon as possible so that we do not lose more time in terms of starting to do the actual work of this project,” Energy Principal Secretary Eng Joseph Njoroge said earlier in the forum on Monday.

“I don’t want to speculate (the winner) but I think you have gone through the presentations and your guess is as good as my guess,” Njoroge told Capital FM Business.

Shanghai Electric Company and HCIG Energy had raised concerns of what they term as unfair evaluation among the three bidders.

“I thought in the end all we wanted is to see that Kenyans get cheap power. But as I see here, that is not the case because I don’t understand why one would charge more and win this tender. You have just funny excuses in siding with our competitor,” lawyer Ahmednasir Abdullahi said, representing Shanghai Electric.

Evaluation committee chair Simon Ngure however maintained that that his team had done everything according to the law accusing the two firms of having their own hitches that may have brought about challenges in the final computation.

“The problem is that they introduced in our formula, a second number. We had only two parameters; one is on the fuel price and the other one is specific fuel consumption. And to get the fuel charge they gave us, they introduced a third number. It was not acceptable that they would introduce some number,” Ngure said, “Essentially what that number is doing is to change the specific fuel consumption.”

The project will cost approximately Sh177billion ($2billion), of which approximately Sh44.2billion ($500 million) will be funded by equity and the balance will be funded through debt.

“Once complete, the power plant will be the single largest power generating plant in East, Central and Southern Africa (excluding South Africa), and will account for approximately 55percent of Kenya’s power production measured by today’s installed generating capacity,” Gulf Energy CEO, Francis Njogu noted.

The 960 Megawatt coal project is part of the 5,000 Megawatts power projects set by the Jubilee government expected to be complete in three and a half years time.

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