Independent Power Producers (IPPs) are currently embroiled in dispute with the Geothermal Development Company (GDC) over a Sh4.2 billion tender.

A consortium has challenged GDC’s decision to cancel the contract before the Public Procurement Administrative Review Board.

The group comprising of Alpha Beta Ed PTE Ltd and Ryce East Africa Ltd, protests GDC’s decision to cancel a tender for the supply and installation of a five-to-ten mega-watt geothermal power plant at Menengai Geothermal Project Station.

They argue the geothermal energy firm abruptly terminated the process on February 5th 2025, despite being legally required to complete the evaluation within 30 days of opening the bids.

The petitioners, appeared before the board chaired by Hussein Were, stating tenders were opened on October 18th 2024 and evaluation should have been completed by November 17.

They claim GDC’s decision to cancel the tender months later was not only unlawful but also lacked reason and legal foundation.

According to the tender awardees, halting the process at such an advanced stage puts the IPPs at serious financial risk.

“The procuring entity violated Section 63(4) of the Public Procurement and Asset Disposal Act, 2015, by failing to disclose, in the letter communicating the termination of procurement proceedings. The impugned decision therefore failed to meet the requirements of the law, and is therefore null and void.”

The companies are urging the board to direct GDC to resume the tender process without any further delays. Sosian Energy, another independent power producer, has backed the consortium’s position.

GDC defended its actions by explaining that it had invited bids on July 16, 2024. The original submission deadline of August 16, 2024, was extended twice, first to September 18 and later to October.

When the bids were finally opened on October 18th at 11 am at the GDC Kawi House offices, representatives from the bidding companies were present to observe the process.

During the preliminary evaluation, six bids were reviewed to ensure they met the mandatory requirements. Five bidders qualified and moved on to the technical evaluation stage, where they all scored above the required 70 per cent threshold, proceeding to the financial evaluation.

However, on November 18, 2024, secretarial notes recommended that the evaluation committee revisit its report.

As a result, Oasis Consortium, Alpha Beta Ed PTE Ltd and Ryce East Africa Ltd were disqualified for failing to comply with Clause 27 of the tender document, which required technical and financial proposals to be submitted in separate sealed envelopes.

On December 3rd, GDC’s accounting officer rejected the evaluation committee’s recommendation to move forward with the four remaining bidders.

The decision was based on a report concerning the MW-12 well citing technological issues affecting one of the critical wells in the project.

GDC’s Acting Supply Chain Manager, Patrick Kapto, explained that a termination letter was sent on February 5th 2025, informing Alpha Beta Ed PTE and Ryce East Africa of the project’s cancellation.

GDC is now urging the board to dismiss the consortium’s challenge, insisting that their case has no merit.

Represented by lawyer Charity Zeron, the Geothermal energy firm explained the delay in completing the evaluation was due to the tender’s complexity and the need to comply with Clause 27.

GDC maintained their decision was made within legal confines and in the public’s best interest.

“The Applicant’s claim that the termination put their sensitive commercial designs and intellectual property at risk is baseless. The decision was made per the law and was driven by technological challenges that were beyond the Respondents’ control,” stated the supply chain manager.

They argue that canceling Tender No. GDC/GRD/OT/001/2024-2025 was legally justified under Section 63(1)(a)(ii) of the Public Procurement and Asset Disposal Act, 2015, and are urging the board to uphold their decision.

Alpha Beta Ed PTE Ltd and Ryce East Africa Ltd have listed GDC and its accounting officer as respondents in the dispute.