Sh20B Soin-Koru Dam Contract To Chinese Consortium Was Signed Illegaly


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The Sh20billion contract for the construction Soin-Koru Multipurpose Dam awarded to two Chinese firms by the National Water Harvesting and Storage Authority (NWHSA) was signed illegally.

It has now emerged that the NWHSA Chief Executive Officer Sharon Obonyo defied notice by the Public Procurement Administrative Review Board (PPARB) dated May 6, 2022 directing suspension of the procurement process and or signing of the contract between the procuring entity and the successful tenderers until the ongoing appeal is finalised.

The hurriedely signed deal was executed without approval by the Board of Directors whose tenure lapsed late March this year.

However, last week, six days later, on May 12, 2022 Obonyo invited representatives of China Jiangxi International Kenya Limited and China Jiangxi International Economic and Technical Cooperation Company to authority’s headquarters in Nairobi for the contract signing.

She also invited the outgoing board Chairman Maj Gen Andrew Ikenye who was appointed as Kenya’s High Commissioner to the Federal Republic of Nigeria in April and has already been vetted by the Departmental Committee on Defence and Foreign Relations of the National Assembly.

Investigations revealed that the session was hurriedly done at the sixth floor boardroom of Water Plaza along Dunga Road in Nairobi.

“You are hereby informed that on May 5, 2022 a Notice of motion under certificate of urgency was filed with the Public Procurement Administrative Review Board in respect to the above tender.”

“Please note that according to the Public Procurement and Assets Disposal Act 2015, the procurement process should be suspended and no contract subject to the regulations can be signed between the procuring entity and the successful tenderers until the appeal has been finalised.” A letter by the acting Board Secretary P. J Okumu reference number PPRA/ARB/7/60/2021 and addressed to the NWHSA CEO dated May 6, 2022 reads in part.

The contract was signed by the authority and representatives from China Jiangxi International Kenya Limited and China Jiangxi International Economic and Technical Cooperation Company against China Gezhouba Group Company Limited.

Questions have further been raised why same individuals were recycled in the evaluation teams for the controversial contract, Tender No: NWHSA/OIT/002/2020-21 amid claims of bribery.

The water authority signed the now presumed illegal contract with the two firms a day after the due date the former was directed to file response before the review board.

“Please submit your response in 8 bound copies within 5 days from the date of this letter, including a soft copy of the response on the review, background to the tender evaluation report and procurement officer’s professional opinion. Your response should be filed separately from the confidential reports which should not be availed to other parties except as guided by Section 67 of the Public Procurement and Assets Disposal Act 2015.

Further, the CEO was directed to immediately submit to the Board Secretary the contact addresses of all those who participated in the controversial tender including their postal and physical address, email, telephone and fax numbers respectively.

National Water Harvesting & Storage Authority (NWHSA) Chief Executive Officer Sharon Obonyo (Left) during the signing of a contract for the construction of Soin-Koru Multipurpose Dam with China Jiangxi international Kenya Limited and China Jiangxi International Economic and Technical Cooperation Company limited and her office on May 12, 2022.

Last year, China Jiangxi Economic Cooperation and China Gezhouba were involved in a vicious legal battle over the award of the tender.

China Gezhouba moved to the procurement review board to contest award of the tender to citing irregularities in the tendering process.

The company reckoned that the NWHSA decision to award the contract to China Jiangxi was irregular and unfair as the rival firm had placed a higher bid of Sh19.9 billion.

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Public procurement regulations require that prequalification to evaluate a bidder’s ability to perform the contract obligations is done before the process moves to the technical and financial evaluation stage which awards the contract to ‘the lowest evaluated bidder.’

In its appeal to the Public Procurement Administration Review Board (PPARB), China Gezhouba argued that the authority did not pick the lowest bidder for the Nyando Dam works, causing it to lose the job.

China Gezhouba placed a Sh19.2 billion bid for the job.

However, the NWHSA responded to the appeal arguing that China Gezhouba had failed to meet all the contract requirements and therefore did not make it to the final round of the tendering.

“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 evaluation stages,” said NWHSA.

The water authority claimed China Gezhouba had, among other things, submitted documents in Chinese whose translation to English language had not been certified.

The firm also failed to commit to buy at least 40 per cent of the supplies used in construction of the dam from local firms, the water harvesting authority says adding that the petitioner also failed to demonstrate capacity through proof of ownership of earthmovers and other equipment for the job.

China Gezhouba is also said to have failed to provide evidence of permanent residency in Kenya.

The water authority said it is for these reasons that China Gezhoub’s bid was declared non-responsive and did not proceed to the technical and financial evaluation stage.

But China Gezhouba refuted the claims insisting 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 and were arrived at by misapprehending the tender documents submitted by the applicant,” China Gezhouba says in its filing at the PPARB.

China Gezhouba claimed that 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 says.

China Gezhouba is not new to Kenya’s construction market and has won multi-billion-shilling tenders for construction of major works, including Thwake Dam in Makueni County as well as the Northern Collector Tunnel in Murang’a County.

Once complete, the dam will have a storage capacity of 93.7 million cubic metres, supply 72 million litres of water per day for domestic use, irrigation of 2,570 hectares and generation of 2.5MW of hydropower.

The delayed Soin-Koru Dam is supposed to be put up along the River Nyando in Kisumu County to contain perennial flooding as well as improve water access for residents. It is also expected to expand rice farming in Kano Plains.

Parts of Kisumu, Kericho and Nandi counties are expected to benefit from the water supplied by the dam which 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.


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