Lebanese Firm Overcomes Bid Protest Over $490-Million Pipeline in Kenya
Lebanese family-owned firm Zakhem International Construction is set to build a $490-million multi-product oil pipeline in Kenya after a petition challenging the award of the contract was thrown out in mid-July by a government procurement agency.
The 450-kilometer, 20-in.-dia pipeline linking East Africa's trade gateway of Mombasa to Kenya’s capital, Nairobi, will ease transportation of fuel to the land-locked economies of Uganda, Rwanda, Burundi and parts of the eastern Democratic Republic of Congo. The countries rely on road transport to move their fuel imports and petroleum products from Mombasa-based Kenya Petroleum Refineries Ltd., currently East Africa’s only refinery.
The project is expected to be completed in 18 months. It will be laid alongside the current pipeline, also constructed, in 1973, by Zakhem and whose 30-year life span expired 11 years go.
“Replacement of the oil pipeline is intended to ensure sustained, reliable and efficient transportation of petroleum products in the eastern Africa region and meet demand up to the year 2044,” says Charles Tanui, managing director at state-owned Kenya Pipeline Co., the owner of the project.
He adds that Zakhem International has 40 years of experience in oil-pipeline construction and is best suited to complete the project. The project’s start was delayed because of a bid protest from losing bidders China Petroleum Engineering and Construction Corp., Kalpataru Power Transmission and China Wu Yi Co.
Tanui says the decision by the Public Procurement Oversight Authority, a government agency that arbitrates disputed tenders, and the High Court in Nairobi “vindicated the process leading to the award of the contract.”
However, a parliamentary committee on energy also is probing the contract award to Zakhem, although its findings may have no legal binding on the project’s start. KPC is yet to confirm when the project will break ground.
“Being the company that constructed the initial Mombasa-Nairobi multi-product pipeline in 1973, I am confident that we are equal to the task and shall certainly deliver the project within the stipulated time,” says Ibrahim Zakhem, managing director Zakhem International.
In addition to building the pipeline, the contractor will construct a fiber-optic cable along the project’s route. Zakhem also will construct new pump stations at Changamwe, Maungu, Mtito Andei and Sultan Hamud and two booster pumps at Kipevu, near Mombasa.
Zakhem International says it has successfully executed contracts for oil pipelines, refineries and fuel-storage projects in Tanzania, Libya, Nigeria, Iraq, Qatar and Italy.
China’s Shengli Engineering and Consulting Co., which designed the pipeline project, has been awarded the consultancy tender.