Kenya Power broke own rules in Smart Meters tender

The Regulatory Authority claims that after failing to deliver 91,000 electrical meters under a prior contract, Kenya Power gave Smart Meters Technology Ltd the multi-billion dollar contract.
The power company disregarded it’s own bidding conditions, which stated that bidders having more than 50% outstanding Kenya Power orders were not qualified for the offer, according to Patrick Wanjuki, the PPRA director-general, who testified in front of Parliament.
According to Mr. Wanjuki, considerations for the tender’s award were timely delivery and satisfactory performance of at least 50% fulfillment of prior orders.
He claimed that despite having a deadline of 24 July, 2020, Smart Meters Technology Ltd. has not fulfilled the order by July 2023.
“Based on data sheet ITT 3.7 (2) and ITT 40 (20 (c), bidders with more than 50% 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% delivery on previous orders,” Mr Wanjuki told the Senate Committee on Energy.
“However, PPRA noted that M/s Smart Meter was among the bidders awarded the subject tender whereas the firm had an order of 91,000 meters that were due on 24 July, 2020 and none had been delivered as evidence in the partially or not delivered purchase order report availed for review.”
In order to explain the procurement of the smart meter tender, Mr. Wanjuki and Kenya Power managing director Joseph Siror went before the committee.
Four local firms, including Smart Meters Technology, have been given a lucrative new KSh5.4 billion contract to provide 711,740 meters, raising concerns about the legitimacy of the decision given that the company had not yet completed the delivery of meters under the prior contract.
Magnate Ventures Ltd., Yocan Group Ltd., and Inhemeter Africa Company Ltd. are additional businesses that received the new contract.
After Kenya Power managing director claimed that Smart Meters Technology had fully supplied the 91,000 smart meters before the new bids, Mr. Wanjuki and Dr. Siror got into a fight.
Technology had fully delivered the 91,000 smart meters before the new bids.
“KPLC responded to the concerns raised by PPRA that contained gross misrepresentation of facts,” Mr Wanjuki said.
“KPLC provided the factual position of the issues raised, including the correct status of delivery on previous contracts with M/s Smart Meters Technology Ltd, which stood at 99.7% contrary to PPRA’s assertion and press reports that the company had failed to deliver an order of 91,000 meters awarded 3 years ago.”
The PPRA began an investigation into Kenya Power’s purchase of smart meters after receiving a complaint from a man named Benedict Kabugi alleging contract violations.
Mr. Kabugi contested the tender, alleging that the electric utility company had improperly and illegally limited it to local assemblers.
According to him, the eligibility requirements were only for regional manufacturing companies in the tender documents that were released following the February announcement.
He said that the eligibility requirements were purportedly increased to include regional meter assemblers rather than manufacturers, which significantly altered the initial eligibility requirements.
Dr. Siror’s assertion was disputed by Mr. Wanjuki, who insisted that it evaluated the power utility company’s asset disposal and procurement processes in the fiscal year 2022–2023.
“Kenya Power had planned to spend KSh3.8 billion for the financial year 2022/23 on meters, but, however, ended up spending KSh5.43 billion against the budgeted amount,” Mr Wanjuki told the committee chaired by Nyeri Senator Wahome Wamatinga.
“Based on the information provided, it was PPRA’s observation that Kenya Power would have had a financial advantage and saved on costs of approximately KSh29.8 million had they clustered the individual items as lots and awarded criteria to be the lowest evaluated bidder per lot.”
Although the purchase of smart meters was included in the Kenya Power procurement plan, according to Mr. Wanjuki, there is no proof that the board accepted the idea.
on accordance with Presidential Executive Order No.2 of 2018, he claimed Kenya Power failed to publish the notice of the purchase on the Public purchase Information Portal (PPIP).
The PRRA highlighted that Kenya Power did not follow the procurement plan’s requirement to reserve 30% for preference groups.
“Most of the tenders processed through restricted methods were not supported by the provisions of Section 102 of the Act,” Mr Wanjuki said.
“Some contracts were signed after the commencement and outside the tender validity period specified in the tender documents, contrary to the procurement Act.”
According to Mr. Wanjuki’s claims that they were accepted without supporting documentation, the assessment by the PPRA revealed a significant number of contract modifications and procurement terminations.
He informed the MPs that Kenya Power did not use the standard tender documents issued by the PPRA and did not fully customize documents, adding that many State institutions disobey orders from the PPRA to halt procurement where tender provisions are broken.
“We have instances where entities sign contracts despite us writing to stop the procurement. We have no power to stop them,” Mr Wanjuki said.
Agencies