Questions as KenGen Fights To Keep Cancelled Tender for Power Plant Consultancy Work Awarded to Firm That Quoted the Highest Price

Kenya’s state-owned electricity generator KenGen finds itself embroiled in a controversial procurement battle after moving to court to challenge a decision that cancelled a multi-billion shilling tender awarded to the highest bidder—raising serious questions about the company’s adherence to competitive bidding principles.

The Kenya Electricity Generating Company (KenGen) has filed a judicial review application seeking to overturn the Public Procurement Administrative Review Board’s June 11 decision that cancelled the award of a consultancy contract for the planned Sh31.9 billion Olkaria VII geothermal plant.

At the heart of the controversy is KenGen’s decision to award the lucrative contract to Italian firm ELC Electroconsult, which quoted Euros 18.16 million (approximately Sh2.7 billion)—significantly higher than the Sh2.5 billion bid submitted by the joint venture of Sintecnica Engineering S.R.L and Steam S.R.L.

The case exposes fundamental questions about procurement fairness and value for money in Kenya’s public sector, particularly when the losing bidder offered to deliver the same services for Sh200 million less.

The Procurement Puzzle

According to procurement documents, ELC Electroconsult secured the contract with a combined score of 91.2 percent against the joint venture’s 78.43 percent.

However, the procurement watchdog found serious irregularities in the evaluation process that favored the higher-priced bidder.

The review board determined that KenGen’s evaluation committee “improperly introduced an undisclosed sub-criteria and adopted a comparative methodology not contemplated in the tender document.”

More damaging was the finding that the committee denied scores to bidders who had met all requisite qualifications.

Matteo Quaia, CEO of Steam and party to the joint venture, told the court that the board’s investigation revealed both losing bidders should have scored 77.6 marks out of 80—a score that would have made them competitive against the eventual winner.

KenGen’s Defense Raises More Questions

KenGen’s response to the board’s findings has only deepened concerns about the procurement process.

The company argues that the review board “usurped the evaluation committee’s powers” and committed errors by “introducing a method of scoring that is not contained in the tender document.”

However, this defense appears to contradict the board’s finding that it was KenGen’s own evaluation committee that introduced undisclosed criteria—not the review board.

Vincent Mamboleo, KenGen’s acting general manager for supply chain, claimed the board’s decision “clearly pre-determines the winner” and reduces re-evaluation to mere “rubber-stamping.”

Yet critics argue this was precisely what KenGen’s original evaluation did by favoring a higher-priced bidder through questionable scoring methods.

The Olkaria VII project represents a significant investment in Kenya’s renewable energy infrastructure, with the 80MW plant set to increase KenGen’s geothermal capacity to 879.3MW.

The controversy surrounding its consultancy contract award raises broader questions about procurement governance in Kenya’s energy sector.

Industry observers note that competitive bidding exists to ensure taxpayers get value for money.

When a state corporation fights to retain a contract awarded to the highest bidder, it undermines the fundamental principles of public procurement designed to protect public resources.

The case also highlights ongoing challenges in Kenya’s procurement system, where technical evaluation processes can be manipulated to favor preferred bidders, even when they quote higher prices.

Justice John Chigiti has directed parties to file submissions, with judgment scheduled for July 24.

The court’s decision will determine whether KenGen must re-evaluate the tenders as directed by the procurement board.

Meanwhile, the tender validity period has been extended to July 27, keeping the procurement process in limbo.

The losing bidders’ request for Sh2.49 billion in compensation was declined by the tribunal, sparing KenGen from additional financial exposure.

As KenGen battles to retain its controversial award, the case serves as a test of Kenya’s procurement oversight mechanisms and whether they can effectively challenge questionable decisions by state corporations.