Sh180bn Nairobi-Nakuru highway gets the nod

A petition by a consortium of four foreign firms seeking to block the award of a contract for the construction of the Sh180 billion Nairobi-Nakuru-Mau Summit highway has been thrown out.

The four firms had appealed against a decision by the Kenya National Highways Authority (KeNHA) to award the tender to the Rift Valley Connect (RVC) consortium, which is composed of Vinci Highways, Meridian Infrastructure Africa Fund and Vinci Concessions.

KeNHA had declared the four firms – African Infrastructure Investment Fund 3 Partnership, Egis Projects S.A, Mota-Engil-Engenharia E Construcao Africa, S.A and Orascom Construction – as the reserve bidder meaning that they can only step in if RVC fails to undertake the project.

The Public-Private Partnership (PPP) committee, the State tribunal that arbitrates on public tender disputes, said that the four firms had failed to prove their allegation that KeNHA had engaged in a non-transparent bidding process that interfered with fair competition.

“The prayer that the decision of the contracting authority (KeNHA) dated February 27, 2019, be declared irregular, unfair, unprocedural and unlawful is hereby denied,” committee chairman James Kihara ordered.

“The petitioners have not demonstrated to this committee the law, procedure or provisions of the request for proposal that were breached by the respondent.”

The move now paves the way for building of the 175-kilometre highway under the PPP arrangement, nearly two years after KeNHA invited several global firms to bid for the project.

The project will involve expansion of the road into a four-lane dual carriageway from Rironi in Limuru to Mau Summit in Nakuru County as well as rehabilitation of the Maai Mahiu-Naivasha road.

RVC will be expected to build, maintain, manage and operate the highway and recover money from motorists in the form of user fees.

It is part of the controversial road tolling programme on major roads under the PPP arrangement.

The concession for the road will be for a period of 30 years and is part of the Northern Corridor road that connects the Port of Mombasa via Nairobi to the border with Uganda at Malaba and onwards to Kampala.

The road is used for transporting most of the West-bound cargo from the Port of Mombasa and Nairobi.

It is expected to significantly reduce the travel time between Nairobi and Mau Summit and the traffic snarl-up experienced on the highway.

The Treasury has estimated that the average number of vehicles plying the Nairobi-Mau Summit segment of the corridor daily is 16,000, and that the traffic peaks in Nakuru where traffic could rise to 40,000 vehicles.

“The road is listed among the most dangerous in the world, having killed 575 people between 2012 and 2014,” it notes.

KeNHA director-general Peter Mundinia had earlier told the Business Daily that the agency had finalised evaluations of the bids.

He said four consortia had been shortlisted, but only two submitted their bids.

“We will pick one firm as the preferred bidder and another as a reserve bidder,” Mr Mundinia had said at the time.

However, when it awarded the tender to RVC, the other consortium challenged the award at the PPP committee.

The government agency told the committee that while the four-firm consortium’s financial proposal was Sh194.97 billion, that of RVC was Sh159.5 billion.

KeNHA had further said that it had an obligation to preserve the confidentiality of the tender evaluation process, a position the consortium had disagreed with, saying it amounted to lack of transparency.

The losing consortium had also argued that the committee lacked powers to hear their appeal. However, both arguments were dismissed.

“The committee holds that it has jurisdiction to entertain this petition but also finds Article 35 of the Constitution is not available to the petitioners,” it said.

It stood by KeNHA’s assertions that the consortium was made up of foreign firms and could not access such information given that the right to such information is limited to Kenyans only.

“The respondent is only required to communicate the outcome of the procurement process to the bidders under section 56(3) of the PPP Act,” said the committee.