Kenya Power accused of bias in meter tender

The Energy Meters Assemblers and Manufacturers Association (EMAMA) says the power distributor is favouring international suppliers which they claim flouts the Public Procurement and Disposal Act. 

It provides for preferences and reservations for public tenders to locally owned firms or with 51 per cent local shareholding.

In case a local firm lacks capacity, an international bidder must  reserve at least 75 per cent of employment opportunities for Kenyan citizens for works and consultancy services.

Where an international tender does not meet the above requirements, specific approval from the National Treasury shall be required.

The lobby argues that the tender requirements are skewed, unfair, and meant to shut out local manufacturers from the multibillion-shilling business opportunity.

“That the requirement to procure meters from OEM manufactures is meant to lock out local assemblers and manufacturers who have since 2015 been supplying Kenya Power with meters,” the association says in a letter to the distributor seen by the Star. 

Yesterday, Kenya Power referred the Star to a previous ruling by the procurement authority that locked out local bidders on grounds that the firms manufacture substandard metres.

“That to secure the required standard of efficiency, reliability, security of supply and quality of service or its customers, it’s not sustainable for Kenya Power to engage in procurement of meters that are inferior, substandard and are prone to multiple failures,” the firm said.

On May 20, the Public Procurement Administrative Review Board (PPARB) dismissed a similar case by a section of local assemblers challenging the tender on technicalities.

“Having considered the matters above the Board’s position (is that) the request for review dated May 20, was filed out of time as provided for under section 167(1) of the Act. The board lacks jurisdiction to entertain the application,” the PPARB decision states.

The firms in question included Inhemter Africa Company Limited, Smart Meters Technology Limited, Shenzhen Star Instrument Company Limited and Magnet Ventures Limited.

The four in their pleadings argued that Kenya Power through the tender requirements had effectively locked them out by skewing the requirements in favour of some foreign firms.

The aggrieved firms singled out a requirement for the successful bidder to have a minimum of 15 years of technical specifications experience in the manufacture of energy meters.

Kenya Power also required that meters on offer shall have been in service and given reliable service for a minimum of eight years in at least two power utilities in at least three of the following continents/region; Europe, North America, Africa, Asia, South America or Australia.

“This condition is unreasonable, impractical and discriminatory and meant to stifle and fairly deny members of the applicants an opportunity,” they protested.

The products include but are not limited to electricity meters, prepaid meters, smart meters, ordinary meters, ANSI meters, DIN rail-mounted meters, power cables, and advanced metering manufacturing solutions.

According to the association, the move is contrary to Kenya Power's 2015 call inviting interested local manufacturers to participate and become key energy sector players in line with the Country’s Big Four development agenda where manufacturing is a key pillar.

“It is important to note that as a result of the invitation by Kenya Power, the local manufacturers embarked on setting up local factories which have undergone proper accreditation with Kenya Power,” the letter signed by the association's chairman Stanley Kinyanjui reads.

But the local suppliers maintain that they invested heavily by taking out credit facilities, employing and training personnel, carrying out research and design, and building proper capacity to enable them meet Kenya Power's demand.

Their lobby adds that despite all this, Kenya Power being a monopoly now wants to embark on an exclusive partnership with international players thereby completely locking out local manufacturers.

This, it argues will gravely expose them given the investment made and considering that the products are tailor-made and can only suit the energy sector where Kenya Power is predominant.

“The local manufacturers have not achieved break even and have the capacity not only to supply but also to put in place proper warranties which international players cannot guarantee,” the association said.

The association's members aggrieved by the PPARB decision are in court seeking to stop the tender process.