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Ten companies clinch 28pc of State contracts estimated at Sh73 billion
Rubis, the second biggest oil marketer in Kenya, won six deals in the year to June 2024 mainly to supply fuel to off-grid power stations that are owned by Kenya Power.
Ten firms bagged deals equivalent to 28.1 percent of the Sh262.76 billion worth of contracts that public entities floated in the year ended June 2024, underscoring the impact of the big-ticket tenders.
A review by the Public Procurement and Regulatory Authority (PPRA) shows the firms that include two Chinese companies, French oil major Rubis Energy Kenya and an Indian pharmaceutical firm won 38 deals worth Sh73.9 billion.
The deals were the most lucrative given that they accounted for 0.1 percent of the total 34,224 tenders that entities across the national and county governments awarded in the year under review.
“The 10 suppliers awarded 38 contracts worth Sh73,901,006,719.38. Hetero Labs Limited Secured two contracts cumulatively valued at Sh30,276,013,904.8 closely followed by Chongqing International Construction Corporation (CICO) at Sh15,424,461,082.00,” PPRA says in the report for the year that ended in June 2024.
Hetero Labs, which is headquartered in Hyderabad, India won deals to supply antiretroviral (ARVs) drugs, while Chongqing International Construction Corporation’s sole deal in the 2023/24 year was construction of the Kenya - South Sudan Link Road (Kitale – Morpus) Project, spanning 75 kilometres.
Rubis, the second biggest oil marketer in Kenya, won six deals in the year to June 2024 mainly to supply fuel to off-grid power stations that are owned by Kenya Power.
Another Chinese firm, Henan Highway Engineering Group Company Limited won two road construction deals in the year under review including construction of the 68-kilometre Gatanga highway project in Nyandarua County.
Britam Life Assurance Company (Kenya) Limited bagged four deals worth Sh2.76 billion while IT solutions firm, Next Technologies Limited got 12 contracts worth Sh2.6 billion while Territorial Works (K) Limited –a local engineering firm– won a single deal worth Sh2.54 billion.
Most of the foreign firms are well-oiled compared to their Kenyan counterparts, giving them an upper hand in the fight for the lucrative projects that are capital intensive.
The big-ticket deals are mainly in the roads, energy and health sectors. For example, Chongqing International Construction Corporation's highway project is worth Sh15.4 billion.
The disclosures are in line with legal requirements that compel public entities to publish all tenders on the public procurement portal to ensure competitive bidding and entrench transparency.
PPRA data shows that State corporations topped with 19,010 contracts valued at Sh199.2 billion followed by the counties with 6,829 contracts valued at Sh33.7 billion while ministries and State departments awarded 680 deals worth Sh12.8 billion.
Lucrative projects across the two levels of governments have in recent years attracted scores of foreign-owned companies, whose financial muscle has squeezed out their Kenyan competitors.
Notably, Chinese firms have flocked the energy, railway and roads sectors, triggering outcry from local contractors who have increasingly voiced concerns over their influx.
The outcry prompted attempts by lawmakers to cushion the local firms through the Public Procurement and Asset Disposal (Amendment) Bill, 2024 that seeks to reserve all projects valued at less than Sh1 billion for Kenyan firms.
A similar Bill that had been fronted by former Deputy President Rigathi Gachagua in 2018 was shot down by lawmakers.
But despite the lucrative tenders, the majority of foreign and local firms have been forced to endure years of delay in getting payments, presenting the downside of the multi-billion-shilling contracts.
For example, recent estimates of pending bills incurred by entities of the national government are in excess of Sh500 billion while those for counties stand at Sh172.5 billion.
