Court stops Kenya Power deal over Sh1bn demand

Justice James Makau. PHOTO | FILE | NATION MEDIA GROUP

By SAM KIPLAGAT
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Summary

• The High Court has stopped Kenya Power from proceeding with a tender for insurance brokerage firms, which the court heard might lock out many local companies from the lucrative business.
• Justice James Makau certified the case as urgent, pending the determination of a petition filed by Okiya Omtatah.
• Mr Omtatah says the tender had been advertised in June but was cancelled and re-advertised with new requirements, while others were removed.

The High Court has stopped Kenya Power from proceeding with a tender for insurance brokerage firms, which the court heard might lock out many local companies from the lucrative business.

Justice James Makau certified the case as urgent, pending the determination of a petition filed by Okiya Omtatah.

Mr Omtatah says the tender had been advertised in June but was cancelled and re-advertised with new requirements, while others were removed.

The court heard that Kenya Power first advertised the tender for pre-qualification of insurance brokerage firms on June 8 ahead of its cancellation on July 1 without reasons. It was advertised afresh on July 20 with new requirements.

The fresh advertisement, he says increased professional indemnity cover from Sh200 million to Sh1 billion. Professional indemnity cover protects professionals from legal liability for any acts of negligence, errors or omissions, in the course of duty.

Mr Omtatah says in the first tender, Kenya Power had included “territorial limit within Kenya” in the expression of interest but it was removed in the second advertisement.

The activist says the indemnity cover of minimum limit Sh1 billion is unreasonable and oppressive because even the regulator- Insurance Regulatory Authority itself requires a professional indemnity insurance policy with a minimum limit of Sh10 million.

“The petitioner was aggrieved to note that some of the bidder eligibility requirements had been changed in an unlawful, unreasonable, oppressive, unfair, opaque and discriminatory manner to defeat the provisions of Article 227(1) of the Constitution,” he said.

Mr Omtatah also wants the court to issue an order that tenders issued by the KP must have provision for 30 per cent affirmative action under the Access to Government Procurement Opportunities (AGPO) programme.

“The new requirements are not just unreasonable and oppressive to many local brokers, they discriminate directly in favour of very large firms, and are clearly designed to lock out local players who are relatively speaking, small concerns,” he said.