Kipevu III power generation contract signed

December 1, 2009
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, NAIROBI, Kenya Dec 1- The Kenya Electricity Generating Company (Kengen) on Tuesday announced it had signed a contract for the construction of the 120 MW Kipevu III plant.

This follows the dismissal of an appeal filed by Man Diesel, one of the five companies bidding for the project, by the Public Procurement Appeals Review Board on Friday.

This opens the door for Finnish company Wartsila, who were the lowest evaluated bidders, to proceed with construction.

In dismissing the appeal, the Board noted that Man Diesel did not submit a valid bid bond for the tender and omitted to tender for a substantial part of the works and as such, they had rightfully been found non-responsive by the evaluation team.

Wartsila had the lowest quoted price at 77.7 million Euros (Sh8.7 billion) while Man Diesel was second lowest at 89.7 million Euros (Sh10.1 billion).

Man Diesel filled the appeal on the premise that the price quoted by Wartsila was not sustainable as it was too low in relation to the scope of supply and services specified in the tender.

In a statement, KenGen Managing Director Eddy Njoroge confirmed that Wartsila had committed to complete the project by December 2010 to help stabilise power supply in Kenya.

“This will help us stabilise the power situation in Kenya before we start implementing our plans to add 1,500 MW of capacity from 2013, primarily through geothermal sources, which are reliable and renewable,” Mr Njoroge said.

Mr Njoroge added the power plant would increase the generation capacity significantly and create a sustainable power supply, in keeping with KenGen’s business strategy of diversifying electric power sources.

The Kipevu III Project is one of the key projects being financed through the proceeds from the Sh25 billion Infrastructure Bond that was recently issued by KenGen.

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