Manufacturers could benefit from local Kenya Power (KP) tenders if they leverage on the company's massive expansion programs in the coming years, the Managing Director of Kenya Power said yesterday at a suppliers' meeting held in Nairobi. Dr. Ben Chumo, the Managing Director of the power distribution company called on investors to consult the KP business strategy unit before investing blindly on KP related projects. The forum was jointly hosted by the Kenya Association of Manufacturers (KAM) and KP where local industrialists sought to know why they are not winning the tenders. “Every contract that we sign offers an opportunity and the Kenyan people should seize that opportunity,” he said and asked the manufacturers to bid competitively since even an increase of 10 cents in a quotation could make a big difference, if one thought of it as 10 cents per meter.
Manufacturers brought up issues such as the continued use of imported content when the same is available locally and the failure to use the preferences for local procurement. KP also fails to confirm the capacity of tender winners in keeping with quantities supplied which leads to augmentation by imports. There have been cases of tender disqualification or failure to win on 'light' grounds not related to technical capacity or price of the product. They also place heavy emphasis on the nationality of suppliers rather than the confirmation of the 'nationality' of the product i.e the local content and there are concerns on the recent innovation of framework contracts for supply. KAM has observer status in KP tender committee and for the last three years has scrutinised the award of tenders.
Dr. Chumo told participants that 36 sub stations at a total cost of Kshs 10.45 billion will be constructed in 18 to 24 months. Four of the tenders in this project were awarded to local companies after being split into two between local and foreign firms. Contractors who were awarded these tenders promised to deliver the project in less than 18 months. Dr. Chumo said he would like to see a situation where the spider web concept common in India is adopted locally. “We need to create a web of networks so that when that currency lands on the web, it does not leave very soon,” he said adding that women youth and people with disabilities have been awarded Kshs. 300 million to date in tenders.
Projects such as the Last Mile include the construction of a 24,000 km LV line which will require 480,000 poles. Dr. Ben Chumo sought to know if they were available locally. He decried the lack of a companies manufacturing transformers in Kenya which are procured from India and China and challenged manufacturers to ensure that they spread investments around the country or in keeping with the KP strategy since a large number of upcoming projects will be in Mombasa and will require a lot of cement. He called for flexibility saying: “When we require some changes in our specifications, you should be there for us.”
Manufacturers sought to know why some local companies were not qualifying to get some of Kenya Powers tenders and complained that once they do not win KP tenders, they have a black out for up to three years which has a huge impact on the companies and job creation.
They also claimed that there is a big misconception that the cables & conductors sector do not have capacity when they have excess capacity. Representatives of wood farmers who were present in the meeting also complained that the country had over 40 treatment plants for Gum trees, a record unsurpassed in Africa and stockpiles of poles have accumulated in these treatment plants due to a lack of uptake. Meanwhile areas like Bomet which are good for growing Gum trees do not have a treatment plant. KP promised to continue to work with KAM on more mutually beneficial partnerships in future through similar forums in future. Ms. Betty Maina, the CEO of KAM, encouraged suppliers to ensure they are members of KAM for better organisation and representation. KP will work with KAM to confirm capacity of local manufacturers and the 'nationality' or 'Kenyanness' of the product. Suppliers of treated poles suppliers were requested to work in consortiums on bids as their number was too high and the capacity of some was small compared to the quantity requirements of KP contracts.