RentCo officially begins work after being awarded KenGen’s ksh 52bn tender for Olkaria Geothermal Well Head supply following the court of appeal ruling
[Nairobi, Kenya, 9th September 2017] RentCo East Africa- a leading firm providing off and on balance financing through tailored and customized leasing products to both the private and public sector in Kenya and Sub-Saharan Africa has officially begun work after signing the tender contract with Kenya Electricity Generating Company (KenGen) Ltd. The Ksh 52 billion Tender Award for the supply of geothermal wellheads kicked off following the judgment of the Court of Appeal 28TH July 2017. This followed a previous High Court ruling that approved the 2015 KenGen Ltd Tender Award to RentCo that for some unknown reason had been cancelled.
Appellate judges Asike Makhandia, William Ouko and Agnes Murgor gave the ruling based on the technical and financial analysis presented in the proposal by RentCo East Africa, Lantech Africa and Toshiba Corporation Consortium, that no doubt had the highest Megawatts output. The judges stated that no flaws were found in the procurement process and procedure to warrant cancellation of the entire process.
On Civil Appeal No 24 of 2017 regarding Justice Odunga’s ruling against RentCo, the Court of Appeal judges averred that, “With a clear understanding of the law and in full appreciation of facts in controversy, it is difficult to comprehend how the learned Judge could possibly come to the conclusion that he did”
Correspondingly, with regard to Kengen’s actions, the judges held that “Equally, it is as perplexing as it is confounding that the Kengen, having all through vehemently defended the award of the tender to RentCo and stood together with RentCo on one side, all of a sudden, for reasons only itself can explain, took an about turn to trash its own decision”
As a result, the Court of Appeal exonerated RentCo on ALL allegations in regard to the above stated tender and ordered that the tender be awarded to RentCo; A judgment that has so far been honored.
The judges further ruled that:”RentCo’s Consortium presented the highest availability factor and tariff combination through which KenGen would get highest revenue returns, of USD 785, 273.35.” A consortium led by the other parties fighting the award of the tender had the lowest guaranteed output but the highest connection cost. “If the tender was awarded to the other party, about 7.42MW would have to be obtained through expensive thermal power; which would translate to a daily cost of Ksh 3,761,049.60 (Ksh 114,398,592 monthly and 1,372,783,104 yearly),” ruled the court.
Public Procurement and Administration Review Board concurred with KenGen that RentCo’s financial proposal was better placed to give realistic returns.
