Tata Power barred from 1000 MW coal plant tender

The Kenyan government has reportedly stopped Tata Power, India’s largest independent power producer, from participating in the bidding process for a 1000 MW coal-fired power plant in Lamu after breaching bidding rules.

According to the Kenya Engineer, Tata Power was not only pre-qualified to present a tender application as an individual bidder but it was also part of a consortium that included Kenya’s Gulf Energy, Exxaro Energy Resources Limited and Cennergi Pty Limited, representing a violation of the rules that guard against double bidding.

The Ministry of Energy and Petroleum also noted that because Tata Power owns a significant stake in Cennergi, a subsidiary of Exxaro Resources, it could not be allowed to be part of the consortium under the country’s Public and Private Partnership Act 2013.

The Act prohibits members of a consortium to submit a bid either directly or indirectly through another company, especially if the member has a large stake in a company or controls the bidding company’s management.

As East Africa’s largest economy Kenya is aiming to add more than 5000 MW to the national grid by 2016, up from its current 1700 MW of installed capacity, as part of an effort to double its annual economic growth to 10 per cent.

The government considers coal a cheap source of energy and therefore sees it playing a pivotal role in powering Kenya’s economic development.

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