The Star (Nairobi)

8 February 2014

Kenya: Indian Firm Wins Sh24 Billion Laptops Tender

INDIAN firm Olive Telecommunications has won the Sh24.6 billion tender to supply 1.2 million laptops to this year's P1 school entrants.

Education Cabinet Secretary Jacob Kaimenyi announced the award yesterday.

The 1,224,176 laptops include 1,203,359 for pupils and 20,637 for teachers. The company will also supply 20,637 printers and a similar number of projectors. The equipment will be delivered in three phases.

The award is likely to be controversial as the tender documents specified that the supplier had to be an 'Original Equipment Manufacturer'.

In January, Olive allegedly contacted Haier to see if they could manufacture the laptops for them.

"Could you share with me your standard one page ODM (Original Design Manufacturer) and OEM agreement for contract manufacturing. We need to sign and send the same before delegation arrives," Olive Director of Sales Ajay Jain reportedly emailed Haier on January 4.

At the online marketing platform Indiamart.com, Olive describes itself as a "service provider" which also sells customized products to telecom operators.

It says it has presence in 23 countries, has sold 20 million devices worldwide since it was founded in 2006, and employs "11 to 25 people." Arun Kishore Khana is mentioned in another website as the chairman and Chief Operating Officer.

Olive beat Haier Electrical Appliances of China and Hewlett-Packard Europe who had passed the preliminary and technical evaluation criteria from a pool of 16 bidders last year.

"Olive is the lowest and most advantageous bidder at a total price of only Sh24,687,360,497.41. The Government has therefore awarded a negotiated phased-out delivery approach contract to Olive," Kaimenyi said yesterday.

He claimed the government had saved Sh8 billion by contracting Olive since the lowest bidder last year stood at Sh34 billion against a budget of Sh12 billion. The projectm was then re-tendered to try and cut costs.

"This saving is attributed to the application of the Specially Permitted Procurement Procedure (section 92 of the Public Procurement and Disposal Act 2005) which allowed for competitive negotiations," Kaimenyi said yesterday.

When the fresh tender was opened on December 10, HP was the lowest bidder at US$291 million (Sh24.7 billion) followed by Olive at $313 million (Sh26.6 billion) and Haier at US$322 million (Sh27.4 billion).

Later in a "best and final offer" Olive amended its price to US$284 million (Sh24.1 million) after adjusting for costs like transport and technological support. Therefore Olive became marginally cheaper than HP and Haier.

Kaimenyi said the government expects the first batch of the 400,000 laptops in the first quarter of this year. He described it as a "defining moment" in education reform.

He refused to discuss the ownership of Olive.

"It is not in my interest to give the information. You can do it yourself. You can Google. This is a digital government," he said.

He said government cannot react to rumours that Olive does not manufacture laptops. He said that government dispatched officers to do due diligence on Olive and they came up "with good tidings."

Yesterday, Education PS Belio Kipsang said the government expects 60 per cent of all 20,000 schools to be connected with electricity by the time the laptops are delivered.

He said so far 11,000 schools are connected and that another 4000 will be connected by June. He said government agrees that the rural electrification agency will need more money to connect more schools.

Kaimenyi however said schools that are off the national grid will be provided with solar power to run the laptops.

Yesterday government also suspended all secondary school fee increases with immediate effect, quashed motivation fee and suspended school heads conferences.

The government has also agreed to form a task force "in due course" to review fees structure in public schools which has not been done since 2007.

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