Kenya Electricity Transmission Company (KETRACO) has been ordered by the High court to pay a Spanish firm Ksh4.4 billion in the next 40 days.
Justice Maureen Odero of the Milimani Commercial and Tax Division upheld a decision by an arbitrator in July 2019, who had awarded Instalaciones Inabensa SA company Ksh4.4 billion faulting the electricity company for breach of contract.
"I find no evidence that the award published on August 26, 2019 contravenes public policy. I therefore decline to set aside the arbitrary award dated July 2019," she said.
According to the Spanish firm, they had been awarded the tender in 2013 to construct a 1200 megawatt capacity substation and a 420-kilovolt double-circuit electricity transmission line meant to connect Kenyan and Ugandan power grids.
The transmission line would consist of a 127 km stretch and would cover the distance between Lessos, Nandi County and Tororo town in Uganda.
However, Inabensa company argued that their tender was cancelled in 2016. In its defense, KETRACO alleged that the firm could not meet the deadline slated for the project. Reports indicate that the Spanish firm had completed 40% of the project by the time the tender was withdrawn.
This prompted the Spanish firm to file an application to prevent KETRACO from awarding another company the tender. However, both parties agreed to settle their differences outside the court through the use of an arbitrator.
The Institution of Engineers of Kenya, appointed as the arbitrator, reviewed the evidence and awarded the Spanish firm Ksh4.4 billion citing that the electricity company had reneged on its contract terms.
KETRACO took the matter to the High Court citing that the ruling by the arbitrator was insubstantial. However, Justice Odero upheld the order and ruled in favor of the Spanish firm.
KETRACO is a government institution formed in 2008 to plan, design, construct and strengthen the national power transmission grids within the country.
The company is also responsible for designing, building and maintaining interconnectors with neighbouring foreign countries. KETRACO, since its inception, has completed 27 projects and constructed over 2,424 transmission lines within various regions in the country.
