High Court invalidates single-source contract for bulk grain handling facilities at Mombasa port. 

The case: Okoiti v Kenya Ports Authority & 5 Others (Petition E045 of [2021] & E018 of [2022] (Consolidated)) [2023] KEHC 20571 (KLR) (18 July 2023) (Judgment) 

KI’s Role: KI was an interested party in this case. It supported the claims by the petitioner that Kenya Ports Authority’s licensing of a facility for handling and storing bulk grain (bulk grain handling facility) violated the Constitution and the laws on procurement. 

Court: Mombasa High Court 

What it’s about: This case is about the process Kenya Ports Authority (KPA) used to issue a licence for a new facility for receiving and storing bulk grain at the Mombasa Port. The licence was controversial for two reasons. First, the master plan for the Port did not include adding a bulk grain handling facility. Second, KPA’s Board of Directors granted the licence even though the law states that the KPA management, not the Board, is responsible for procuring goods and services for the Port. Third, the Board of Directors decided to award the licence to a supplier without following the competitive procedures required by the law on public procurement and Article 227 of the Constitution. 

What happened: The High Court ruled in favour of the petitioner and nullified the licence for the bulk grain handling facility. It held that the Kenya Ports Authority management, not the Board, had the authority to procure goods and services for the Port. It also held that Kenya Ports Authority had to use a competitive bidding process for such tenders. Failing to use a competitive process violated Articles 10 (on national values including public participation, transparency, and accountability), 201 (principles of public finance) and 227 of the Constitution. Finally, it asserted that the procurement of goods and services for the Port must follow the Port’s Master Plan. 

Why it matters: Public procurement – the process by which the government contracts for goods and services – has always been a source of corruption, kickbacks, and favouritism. From an economic perspective, procurement-related corruption distorts markets and results in inefficient, expensive, and lower-quality goods and services. From a good governance perspective, it undermines people’s faith in effective and fair government, thrives in non-transparent processes, and exacerbates existing ethnic and regional tensions. 

Although it may be impossible to eliminate corruption, there are ways to significantly reduce it. Article 227 addresses the issue directly: it states, ‘When a State organ or any other public entity contracts for goods or services, it shall do so in accordance with a system that is fair, equitable, transparent, competitive and cost-effective’. The five requirements – fairness, equity, transparency, competitiveness, and efficiency – are also requirements in the national values of good governance and principles of public finance. Article 227 required Parliament to enact a law to establish a framework for public procurement that meets those requirements. That law, the Public Procurement and Asset Disposal Act, was enacted in 2015. 

On paper, many State organs have sound procurement processes. In practice, those policies are often manipulated or ignored entirely. Many State organs and public officers talk the talk, but they do not walk the walk. This case clarifies that the law and the processes adopted by State organs matter. When State organs like the Kenya Ports Authority manipulate or ignore their rules, they will be held accountable. Whether corruption is proven does not matter; the critical question is whether the processes established to reduce corruption were followed. If they weren’t, as was the case here, the resulting contracts are invalidated. 

When public interest litigants file such cases, they allow the courts to play their essential role of invalidating illegal and unconstitutional processes. They also show State organs, government officials, and those in the private sector who try to obtain contracts improperly that it is more efficient and less expensive for everyone to engage in competitive, transparent bidding for government services. 

What’s next: Kenya Ports Authority has filed a notice of appeal, so the Court of Appeal will hear the case. This will allow the Court of Appeal to affirm what the High Court made clear: the laws and processes matter, and State organs must follow them. 


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