The procurement watchdog has allowed the Kenya Urban Roads Authority (Kura) to hire a contractor for a major Sh7.6 billion road project intended to reduce traffic congestion in Nairobi.
The Public Procurement Administrative Review Board (PPARB) rejected an application seeking to block the State agency from hiring a Korean contractor to build the $59 million (Sh7.6 billion) Bus Rapid Transit (BRT) road along the Outer Ring route.
The Republic of Korea is providing a loan to fund the Nairobi BRT Line 5 project, through the Export-Import Bank of Korea (Kexim), a State agency responsible for administering Korea’s Economic Development Cooperation Fund.
The 10.5-kilometre project involves constructing a two-lane BRT line along the entire length of the Outer Ring Road, and is scheduled for completion within two years.
The project also includes the construction of three river bridges, two overpass bridges, 13 BRT stations, new footbridges and modifications to existing ones, and the installation of electrical and mechanical works, street lighting, landscaping works, and the construction of a drainage system.
The PPARB rejected the application filed by CK Solution Co. Ltd, one of the interested bidders. The company is in a joint venture with Kumkang Construction Company Ltd and Beyond Trading Company Ltd. The bidder sued over the alleged rejection of tender documents.
In the application, the bidder wanted the PPARB to direct Kura to admit their bid for evaluation.
Kura only received one bid in response to the tender, from Youngjin JV Limited.
The joint venture, led by CK Solution Ltd, alleged discrimination, stating that Kura restricted the tender to firms from the Republic of Korea.
They claimed that this contravened Kenyan procurement laws, which prohibit technical specifications based on national origin. They also claimed that it conflicted with Article 227 of the Constitution, which requires public entities to have a procurement system that is fair, equitable, transparent, competitive and cost-effective.
No power
However, the PPARB ruled that it lacked the power to hear and determine the application because the tender document and the loan agreement between Kenya and Korea contained clauses on the settlement of disputes.
The board found that the loan agreement expressly stated that the applicable law would be that of the Republic of Korea, and that the accompanying guidelines set out the applicable dispute resolution mechanism.
This meant that the local Public Procurement and Asset Disposal Act could not apply.
“The clauses, when read together with the relevant provisions of the loan agreement, establish a clear procedural framework for dispute resolution as well as the applicable legal regime.
“Consequently, the board is satisfied that the agreement provides a binding dispute resolution mechanism, and the accompanying guidelines go a step further by setting out the applicable dispute resolution mechanism available to all parties involved, thereby excluding the application of the Public Procurement and Asset Disposal Act,” said the PPARB.
Kura’s advocates informed the board that, via an email dated May 26, 2025, Kexim Bank had determined that the bid by the joint venture of CK Solution Ltd was substantially non-responsive.
They stated that the applicant’s grievance had already been considered and resolved by the donor agency by the applicable procurement framework.
In their application, CK Solution Ltd and its partners claimed that the restriction of eligibility to only firms of Korean nationality was arbitrary, discriminatory, and not supported by the loan agreement.
They also protested that the procurement process conducted by Kura was allegedly marred by multiple irregularities, including confusion over the submission venue of the tender and an exorbitant tender document fee of Sh50,000 for an electronic copy.
They said that the law prohibits any fee for electronically obtained tender documents and that Kura’s action constituted unjust enrichment and an unlawful barrier to participation.
They argued that the confusion over submission venues—alternating between the ground floor, the fourth floor, and meeting rooms—breached the procurement laws, which require clarity and completeness in tender documents.
However, Kura lawyers said that the Sh50,000 fee was required and paid by all bidders for the provision of the tender documents.
Kura also told the board that the loan agreement governing the project expressly provided that Korean law would regulate all aspects of the agreement, including funding, procurement and implementation of the project.
It also asserted that the company and its partners had improperly sought recourse from both PPRAB and Kexim Bank, thereby engaging in forum shopping.
The board heard that the company submitted its bid directly to Kexim Bank, but had failed to submit the same to Kura as required.
