Japan’s JICA disagrees with KPA in Sh59bn tender fights

Tensions are rising between the Kenya Ports Authority (KPA) and a Japanese government agency over bids to build a Ksh56 billion special economic zone in the port of Mombasa.

The Japan International Cooperation Agency (JICA) has revealed, for the second time, its disapproval of the Kosovo Protection Agency’s decision to disqualify a bidder due to “minor” oversights that are not critical in the bid evaluation stage, people familiar with the project revealed.

Differences between JICA and the KPA arose over the move to exclude a major company from bidding for the big money deal – which has attracted powerful forces in government eager to influence bids in the billions of shillings.

KPA disqualified the bidder for submitting legal documents based on a misinterpretation of JICA’s procurement policies.

The Japanese agency believes that indifference to non-essential deficiencies will discourage competition in the bidding process, and upset procurement policies that encourage multiple bid review.

JICA’s position follows allegations that bidders and powerful state officials infiltrated the tender to try to move the outcome of the tender.

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The tenders, which were announced late last year, will see the successful bidder construct major facilities on a 3,000-acre plot, with developments expected to boost the economy of Mombasa and the rest of the country.

The contractor is expected to dredge a private jetty, clear the site, construct facilities, including an administration building, and set up a security system and ICT centre.

This entails the establishment of a free trade zone, a port, a logistics center and an industrial zone where space will be allocated for companies using the port of Mombasa to set up warehouses.

Sidewalk dredging will include land expansion and reclamation for the project.

According to the financial proposal, the entire project will be under the JICA loan scheme structured as a grant of Sh6 billion and a soft loan of NIS 50 billion to be repaid within 30 years and a grace period of 12 years.

The project is part of Kenya’s industrialization plan, supported by the revised draft Special Economic Zones Regulations (2019), which offers incentives to companies operating in the area.

While the Public Authority for Planning and Procurement has been commissioned, an evaluation report is required to be submitted to JICA to confirm that all relevant laws and policies were followed in the selection of the contractor.

The tender is being conducted under JICA’s procurement policies as a condition of the funding package offered by the JICA.

The Japanese agency also criticized the KPA for failing to seek clarification from the unqualified bidder.

The KPA claimed that seeking such clarification would be considered a deviation from the rules for a particular bidder.

JICA cited the KPA’s procurement policies that allow the government agency to seek more information from bidders regarding non-essential aspects of their bids.

This appears in the midst of divisions in the KPA’s bidding team over the award of lucrative contracts for the Sh56 billion Dongo Kundu project.

The 11-member bidding committee is split into two factions over which firms to award the multi-billion shillings construction deal.

Bidding battles and claims of erratic transactions may hinder financing and timely completion of a project.

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Allegations of collusion first surfaced in December when the terms of a tender announced in November were amended in what was seen as a plot to remove some bidders from the project.

There are chances that bid wars could lead to a freeze on Japanese funding amid pressure for internal investigations.

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