New Kenya Power Meters Tender Flagged by Procurement Watchdog

A firm that breached a previous contract three years ago was given a new opportunity to supply power meters, and the national procurement watchdog has ordered Kenya Power to justify this decision.

In a letter to Kenya Power managing director Joseph Siror, the Public Procurement Regulatory Authority (PPRA) noted that the company, Smart Meters Technology Ltd, had an order to produce 91,000 smart meters by July 24, 2020, but had not done so as shown by a purchase order report.

Four Kenyan businesses, including Smart Meters Technology, have been given a lucrative Sh5.4 billion contract to provide 711,740 smart energy meters, raising concerns over the legitimacy of the decision given that the firm had not yet completed the delivery of meters under an earlier contract with Kenya Power.

“Based on the tender data sheet ITT 3.7 (2) and ITT 40 (20 (c), bidders with more than 50 percent outstanding Kenya Power orders were not eligible for the tender and award was to take into consideration timely delivery schedules and satisfactory performance of at least 50 percent delivery on previous orders,” Patrick Wanjuki, the director-general of PPRA, said in the letter to the Kenya Power boss.

The board received a complaint from a Benedict Kabugi saying that the tender contained violations, which was followed by the inspection by Mr. Wanjuki.

Mr. Kabugi disputed the bid, claiming that the electric utility company had improperly and illegally limited it to local assemblers. He claimed that the qualifying requirements were solely for regional manufacturing companies in the tender materials that were distributed to potential bidders following the posting in February.

“In addition, the awarded amounts surpassed the allocated budget and the excess amounts were never approved by the board of directors and neither was the procurement plan amended to accommodate the excess amounts which is a breach of Section 53(2 & 8) of the Act,” Mr Kabugi said.

“In view of the foregoing, you are required to make further responses to the observations made above, taking into consideration the financial impact in relation to award criteria applied by your entity to enable us to conclude our review,” Mr Wanjuki said.

According to Kenya Power, crucial and essential providers like hospitals, health centers, dispensaries, and schools, as well as government installations, home customers, and businesses that have paid for the meters, need 50,000 meters.

Kenya Power is relying on smart meters to increase its earnings by replacing its outdated, easily tampered-with meters that prevent it from receiving money through delinquent invoices.