Lamu coal power project given go ahead

January 13, 2015
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Centum Chairman Chris Kirubi and CEO James Mworia. The investment firm is part of the consortium. Photo/FILE
Centum Chairman Chris Kirubi and CEO James Mworia. The investment firm is part of the consortium. Photo/FILE

, NAIROBI, Kenya, Jan 13 – A consortium led by Kenyan companies Gulf Energy Limited and Centum Investment has now been cleared to go ahead with the development of the mega coal power project in Lamu.

In its ruling on Tuesday, the Public Private Partnership (PPP) committee rejected requests by the petitioner – Hebei Construction Investment Group – to stop the 960 Megawatt project on the basis that it was awarded unfairly.

“The prayer to quash and annul the award of the tender to the fourth respondent is hereby rejected. The request by the petitioner for re-evaluation of the financial bids is hereby disallowed,” the committee chairperson, Kihara Muruthi ruled adding that the latter had already been determined by the High Court.

Apart from the rejection of its demands, Hebei Construction has also been ordered to meet all the costs incurred in the petition.

The company had complained that the award was given unfairly especially after the reconstitution of the Gulf Consortium during the final awarding of the tender.

But the committee concluded that this was in line with Public Private Partnership (PPP) Act 2013.

“The above objective clearly places the project, the subject of this dispute, within the clear definition of a Public Private Partnership under the PPP Act,” Muruthi stated.

On the matter of the petitioner having what it termed as typographical error on its fuel consumption rate quotation, the committee said there was no room for further complaints since the Ministry of Energy had earlier sought clarification on this before announcing the winner of tender.

Commenting on the ruling Centum Investment Company Chairman Dr Chris Kirubi said they will kick off the project as soon as possible considering “the time that has been wasted on these cases.”

“We have to go on. The impediments have been removed on us and we now have to run to catch up with the time which we have lost; very precious time,” Kirubi said.

He went ahead to call for changes to procurement laws that will see any petitioner required to pay a fee before stopping any project. He says this will hinder unnecessary delays of important projects.

“You can see here that in all the areas that these people demanded, the committee disqualified and rejected all of them. Which means that there was no reason for them to make any demand stopping this project,” he complained.

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

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

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