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Kenya Power accused of locking out local manufacturers in procurement process

by kenya-tribune

NAIROBI, Kenya August 29 — The Energy Meter Assemblers and Manufacturers Association is protesting being locked out of the procurement of power distribution products by energy utility firm Kenya Power.

The Association in a letter seen by Capital Business dated March 3 noted that Kenya Power is in the process of carrying out and implementing an exclusive international procurement model for the power distribution products leaving them out.

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 advance metering manufacturing solutions.

According to the Association, the move is contrary to an invitation done in 2015 by Kenya Power calling on 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 having carried out the necessary factory inspection and the factories having been subjected to quality checks and obtaining the Kenya Bureau of Standards approval as well as international accreditation,” the letter signed by the Association chairman Stanley Kinyanjui read.

Further, it noted that the local manufacturers invested heavily by taking out credit facilities, employing and training proper personnel, carrying out research and design, and building proper capacity to enable them to meet Kenya Power demand as a result of the future long-term relationship between the local manufacturers and Kenya Power.

The Association decried that despite all these arrangements, Kenya Power being a monopoly now wants to embark on an exclusive partnership with international players thereby completely locking out local manufacturers.

It notes that this will expose them gravely given the investment they made and the products that 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.

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It added that  Kenya power has failed to accord the local manufacturers a fair playing field and this has been caused by their failure to set up a proper framework on procurement of the power distribution products by making haphazard procurements that have led to poor quality and quantity control.

Further in another letter dated March 22, the Association noted that the procurement of services from international firms goes against the local content as provided for in the Energy Act No. 1 of 2019 as well as the Public Procurement and Asset Disposal Act 2015.

The Public Procurement and Asset Disposal Act 2015, Section 155 provides for preferential treatment on articles manufactured and materials and supplies wholly mined and produced in Kenya as well as manufactured articles materials and supplies also partially mined or produced in Kenya and where applicable have been assembled in Kenya.

The Act also provides that for an entity to procure items not wholly or partially manufactured in Kenya a report shall be done detailing evidence of inability to procure the manufactured articles, materials and supplies wholly mined or produced in Kenya and where the funding is 100 per cent from the national or county government or a Kenyan body, exclusive preferences shall be given to the citizens of Kenya.

From the Act, the Association sought clarity from Kenya Power on the meaning of the word manufacturer as captured in their tender bearing in mind that the local players are assemblers who fall under the ambit and definition of Section 155 (3) (a) of the Public Procurement and Asset Disposal Act;

It also sought to understand whether the energy utility firm did a report detailing evidence of the inability to locally procure the products as stated in the Tender and whether exclusive preference has been given to the local players noting that there is no indication that the funding is not from national or county government or a Kenyan body.

Moving forward,  the Association urged Kenya Power not to proceed to make such drastic decisions without involving the local manufacturers and that the local manufacturers should be accorded a proper consultative meeting on the way forward with respect to the supply of power production products.

“We await your quick and urgent call for a consultative meeting with the local players and in the spirit of achieving the Big Four Development Agenda whose objective is to help transform Kenya and in particular the local manufacturers,” the Association concluded.

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