Chinese firms fight over Sh20 billion dam on River Nyando

Two Chinese firms are embroiled in a vicious legal battle over a Sh20 billion dam project along the River Nyando in Kisumu County.

China Gezhouba, one of the firms that had been eyeing the contract, has moved to the procurement review board to contest the award of the tender to China Jiangxi Economic Cooperation.

The National Water Harvesting and Storage Authority in April selected China Jiangxi as the winner of the contract to construct the dam at Sh19.9 billion.

However, China Gezhouba contested the award before the Public Procurement Administration Review Board (PPARB) arguing, among other grounds, that it had bid at a lower cost of Sh19.2 billion.

However, the company, which was among the four that bid for the job, failed to meet all the requirements, according to the National Water Harvesting and Storage Authority.

These included submission of documents whose translation to English language had not been certified and lack of a commitment to buy at least 40 per cent of the supplies to be used in the construction of the dam from local firms.

The authority also said China Gezhouba failed to demonstrate capacity through proof of ownership of earthmovers and other equipment as well as evidence that it has permanent residency.

The bid was thus declared non-responsive and did not proceed to the next stage of technical and financial evaluation.

China Gezhouba, however, refuted the claims, saying it had complied with all the requirements set out by the water authority in the tender documents.

In its filings at the PPARB, the company wants the board to direct the Water authority to evaluate the bids afresh, this time round taking into consideration the documents it had submitted.

“The reason provided by the procuring entity… are incorrect and misleading arrived at by misapprehending the tender document submitted by the applicant,” said the company in its filing.

It said the award of the tender to China Jiangxi was contrary to provisions of the Procurement Act and the Constitution that require procuring entities to ensure cost effectiveness.

“The award of the tender to the second respondent (China Jiangxi) did not meet the constitutional threshold of fairness, equity, transparency and competitiveness… neither was it in compliance with the principles set out in Section three of the Public Procurement and Asset Disposal Act,” the company said..

China Gezhouba is behind some major construction works in Kenya and is currently building Thwake Dam in Makueni County as well as the Northern Collector Tunnel in Murang’a County.

In a replying affidavit filed with PPARB, the water authority’s Chief Executive Sharon Obonyo said China Gezhouba had failed to follow the guidelines that the authority had provided when it invited companies to submit bids to undertake construction of the dam.

She said there were disparities between the documents that China Gezhouba had submitted with the PPARB and what it had submitted to the authority during the tender process.

In some instances, Ms Obonyo said, thew documents presented to PPARB were “misleading and total forgeries as the same are different from the documents submitted in the bid document”.

She also said the company had sent its commitment to source 40 per cent of supplies locally after the bids had already been opened.

Obonyo said China Gezhouba sent an email with the letter on April 9 at 5.40pm while the bids had been opened earlier in the day at 9.00am.

She accused the firm of tampering with the emails filed with the procurement review board as evidence to show that it had sent the email earlier.

“I have noted with extreme concern that the applicant’s email screen grab… has been tampered with and is pure forgery,” the CEO said in her affidavit.

“Specifically, a keen examination of the applicant’s exhibit… shows that the same has been tampered with to mislead the board to perceive as if the email was sent on Friday April 9, 2021 at 7.40am instead of… 17.40 hours by inculcating into the email screen grab a clear alteration or deletion of the number 1 and addition of the suffix AM.”

She added that because of failure to submit all the requirements, China Gezhouba was dismissed as a non-responsive bidder and hence its bid was not considered.

“From the foregoing, the applicant did not meet the preliminary responsiveness and mandatory requirements… the applicant’s bid could therefore not proceed for technical evaluation,” said Obonyo.

“The Act provides that the successful tender is one with the lowest evaluated price… In this case the applicant was not the lowest evaluated tender and was therefore not denied his rightful advance to the technical and financial evaluations.”

Other firms that bid for the job were SBI International Holdings at Sh26 billion and Just Nice Construction at Sh22 billion.

The Soin-Koru dam, which has been in the works for years, is supposed to be put up along the River Nyando in Kisumu County to contain perennial flooding as well as improve water access for the area residents.

It is also projected to expand rice farming at the Kano Plains.

In the tender documents, the authority said it was working with a budget of Sh23 billion, including taxes, to build the dam financed by the government.

“The Soin-Koru Dam is a multipurpose project that will reduce the perennial flooding on the lower reaches of River Nyando. It will also supply water for domestic, irrigation and hydropower generation,” it said.

The dam will have a water storage capacity of 93.7 million cubic metres while providing 72,000 cubic metres of water per day for domestic and institutional use.

The water authority had started the tender process last year but was forced back to the drawing board after all the bidders failed to meet minimum set standards.

It restarted the process earlier this year that culminated with the award on April 15.

Parts of Kisumu, Kericho and Nandi counties are expected to benefit from the water supplied by the dam. The dam will be located at the border of Kisumu and Kericho counties.

“Flooding is a frequent phenomenon in the lower reaches of the Nyando River Basin and poses problems to the communities especially in the lower zones of the river basin,” said the authority in the environmental and social impact assessment (ESIA) lodged with the National Environment Management Authority.

A 2009 report by the Ministry of Water quantified the impact of floods on the lower reaches of River Nyando, noting that it displaced 5,000 people annually and left them with losses of about Sh49 million due to damage to property.

Kisumu County Government recently said it requires about Sh400 million to repair roads destroyed by flooding following recent rains.

The Nyando flooding also interfered with the seasonal patterns of agriculture, threatening livelihoods and food security in the area, according to the water authority. 

The flood water also destroys infrastructure as well as a general disruption of socio-economic activities, with the residents required to evacuate from their homes whenever there are heavy rains.

“Apart from constant flooding, the lower reaches of the Nyando River are also plagued by prolonged drought spells resulting in scarcity of water for irrigation,” said the authority in the ESIA.

“During the period, the Nyando River flow is low and a number of irrigation schemes in the area cannot operate at full capacity, especially in lowers areas of Kano Plain where there are rice paddies.”

It added that water from the dam had potential to increase the area under irrigation from 1,800 hectares to 5,170 hectares in and around Ahero and West Kano Irrigation schemes.  

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