The government will pay Ksh40 million to a contractor after scrapping plans for a Ksh799 million prefabricated exhibition center at the Kenyatta International Convention Centre (KICC).
High Court Judge Lawrence Mugambi ruled that Parbat Siyani Construction Ltd deserved compensation after KICC abruptly canceled the project. He stated that Ksh39.95 million of the payout matched the performance guarantee, compensating the firm for the violation of its rights.
“In my very humble view, the Respondent’s (KICC) conduct in this whole process does not demonstrate transparency or accountability in the handling of the procurement,” Justice Mugambi remarked.
The court found that KICC management was aware of the contract’s timelines but failed to keep the contractor informed, leaving the firm in limbo.
According to Mukesh Halai, director of Parbat Siyani Construction Ltd, his company won the tender in 2018 when KICC first advertised it. However, after a second tendering process, the firm secured the bid again and received an official award letter on January 31, 2019.
The company was formally awarded the contract in April 2019 and invited for negotiations and a design presentation on May 13, 2019. However, the contract signing, initially scheduled for May 16, 2019, was postponed for further discussions.
On May 22, 2019, the company submitted a Ksh39.95 million performance guarantee from I&M Bank as required by the request for proposal (RFP) guidelines.
Days later, KICC canceled the contract, citing “circumstances beyond our control.”
KICC CEO James Mwaura argued that no formal contract was signed, emphasizing that a notification of award does not constitute a binding agreement. He added that the contractor failed to submit the performance guarantee within the required 28-day period.
Justice Mugambi ruled that the government deliberately delayed the process, causing the tender to lapse. He criticized KICC’s handling of the procurement, stating that it lacked fairness and transparency.
“It is my finding that the manner in which the respondent treated the petitioner does not align with the principles of procurement as set out in Article 227 (1). Such conduct cannot be described as transparent or fair,” the judge stated.
He stressed that public institutions must be held accountable to prevent abuse of power in government contracts.
