A company connected to a Cabinet Secretary nominee faced a significant setback in its attempt to operate a new grain bulk terminal after the Supreme Court halted its tender awarded by Kenya Ports Authority.
Judges, including Deputy Chief Justice Philomena Mwilu, Mohammed Ibrahim, Isaac Lenaola, William Ouko, and Smokin Wanjala, issued an order preventing Portside Freight Terminals Limited from developing a grain handling facility at the Port of Mombasa until the resolution of an appeal filed by Busia Senator Okiya Omtatah and the Dock Workers Union.
The Supreme Court ruled, “Until the consolidated appeal is heard and resolved, a conservatory order is issued, prohibiting Portside Freight Terminals Limited, Portside CfS Limited, and Heartland Terminals Limited from building or developing a grain handling facility and island berth at G-Section, an area owned by Kenya Ports Authority in Mombasa, as per the license granted by KPA on August 2, 2021.”
Omtatah and the Dock Workers Union requested the orders, claiming that KPA did not follow the constitutional requirements and the Public Procurement and Asset Disposal Act for procurement.
The judges granted Omtatah’s request to stop the development of a second grain bulk handling facility at the Port of Mombasa, ruling that if Portside Companies continued with the project, the appeal would be rendered ineffective.
The bench led by Mwilu stated, “At this stage, we believe that a conservatory order will not only maintain the current situation but also protect Portside Companies from unnecessary expenses if the appeal succeeds. Any inconvenience and delay they might face can be addressed through a costs award.”
The Supreme Court also instructed that the case be given priority since it has been pending for nearly three years. To prevent further delays and costs for Portside Companies, and given the project’s significance to the nation’s economy, they directed the Registrar to expedite case management procedures and schedule the consolidated appeal for a prompt hearing.
In his appeal, Omtatah seeks for the Supreme Court to overturn the Court of Appeal’s decision that allowed Portside Freight Terminals Limited to build a second facility at the port.
Omtatah argues that the appellate court judges made a mistake by concluding that awarding the contract to Portside was not discriminatory and that KPA and the Treasury did not violate the constitution by selecting the firm.
The Senator asserts that there was no public participation in the tender award process, as the KPA Board of Directors, lacking proper authority, reviewed and approved the license grant to Portside Freight Terminals.
He claims that the procurement process was unfair to four companies—Kilindini Terminals Limited, Grain Terminal Limited, Kapa Oil Refinery, and Africa Ports and Terminals—and argues that the appeal is significant and not frivolous, raising important legal questions regarding constitutional and procurement law violations.
Omtatah alleges that the KPA Board of Directors, acting beyond their authority and in clear violation of legal procedures, improperly reviewed and approved the grant of way leave and a license for Portside Freight Terminals Limited to operate a second bulk grain handling facility at the Port of Mombasa.
He stated in his court filings, “The KPA Board of Directors does not have the authority to procure goods and services; that responsibility lies with the KPA’s management.”
It is reported that KPA chose to use the Specially Permitted Procurement Procedure under the Public Procurement and Asset Disposal Act, 2015, to directly award a license to Joho’s company.
Omtatah contends that KPA and the Treasury’s use of the Specially Permitted Procurement Procedure was intended to bypass competitive bidding, specifically benefiting Portside Freight Terminals Limited.
In his court filings, Omtatah asserts that KPA did not invite other bidders or tenderers to apply for the development of the second bulk grain handling facility, violating public procurement laws. He argues that the procurement process employed by KPA and the Treasury does not meet the standards required by Article 227 of the constitution, which mandates a fair, equitable, transparent, competitive, and cost-effective system for public contracts.
Omtatah further claims that the conditions required for using the Specially Permitted Procurement Procedure were not met. He argues that this direct procurement was used to avoid competition by favoring one firm over six others that proposed developing the facility at either Dongo Kundu or Lamu ports. As a result, the proposals from other parties were disregarded, unfairly excluding them from the procurement process.