High Court of Kenya halts US$45M Grain Facility Project at Mombasa Port

Kenya—The High Court has halted the Kenya Ports Authority (KPA) from awarding Portside Freight Terminals Limited a license to construct a KES5.9 billion (US$45,384,614) grain bulk handling facility at the Mombasa port.

This suspension is pending the resolution of a lawsuit brought by activist Okiya Omtatah, who argues that the procurement process contravened both the Constitution and the Public Procurement and Asset Disposal Act.

The order was issued by Deputy Chief Justice Philomena Mwilu, alongside Justices Mohamed Ibrahim, Smokin Wanjala, Isaac Lenaola, and William Ouko, pending the determination of an appeal filed by the Dock Workers Union and Busia Senator Okiya Omtatah.

The appeal challenges the awarding process of the project to three portside companies: Portside Freight Terminals, Portside CFS Limited, and Heartland Terminals Limited. In their brief ruling, the justices stated that allowing the companies to proceed with the project would render the appeals meaningless.

“The temporary order will not only preserve the status quo but also save the Portside companies from unnecessary expenditure should the appeal succeed,” the judges said.

Omtatah claims that KPA did not follow the required procurement procedures, thereby compromising transparency and competitiveness.

He asserts that the KPA’s board of directors overstepped their authority by making decisions that should have been reserved for the accounting officer, rendering the procurement process illegal.

The legal challenge also points out inconsistencies with the KPA’s master plan, which designated the Dongo Kundu or Lamu ports for such expansions, not Mombasa.

Omtatah’s contention is that the approval for the Mombasa port development was made in violation of this master plan. He also argues that the procurement process was designed to favor Portside Freight Terminals Limited, a firm associated with a prominent Mombasa politician, thereby excluding other potential bidders.

Documents filed in court reveal that KPA sought permission from the Treasury Cabinet Secretary on March 11, 2021, to use a special procurement procedure for single sourcing.

The board approved this request on June 28, leading to the awarding of the contract to Portside Freight Terminals Limited. Omtatah argues that this process was employed to avoid competitive bidding, which is against the principles of fairness, equity, and transparency as mandated by the Constitution.

Furthermore, Omtatah highlighted that other companies, including Kilindini Terminals Ltd, Mombasa Grain Terminals Ltd, Kapa Oil Refinery, Africa Port and Terminals Ltd, Multiship International, and Kipevu Inland Container EPZ Ltd, were unfairly locked out of the process.

He contends that the procurement did not meet the constitutional threshold that requires state organs and public entities to contract goods and services in a manner that is fair, transparent, competitive, and cost-effective.

The court’s decision to halt the project underscores the importance of adhering to legal and constitutional frameworks in public procurement processes.

This case not only sheds light on the procedural irregularities but also emphasizes the need for accountability and fairness in handling public projects. The hearing for the case is set for August 27, where the court will make further determinations on the matter.

Sign up to receive our email newsletters with the latest news updates and insights from Africa and the World HERE.