Water and Irrigation ministry has been ordered to award the contract for first phase of construction of Sh62.3-billion Thwake Dam to China Gezhouba Group, the lowest bidder.
The Public Procurement Administrative Review Board (PPARB) on Wednesday faulted the decision of the former Irrigation Principal Secretary Mwangi Nduati to award the contract to Sinohydro Tianjin Engineering Limited.
In its decision, the board was particularly critical of Mr Nduati's decision to ignore advise from the Attorney-General and the African Development Bank (AfDB), which is the co-financier of the project.
Mr Nduati was the Accounting Officer and clashed with Cabinet Secretary Eugene Wamalwa over the matter.
"It is regrettable that the accounting officer (PS Nduati) could so blatantly act so illegally on this matter. It is shocking that the ministry even decided to ignore lawful advice from the Attorney General and even the bank," said Paul Gicheru, the chairman of the PPARB.
The ministry was ordered to comply with the decision to reverse the award to Sinohydro within 14 days.
"People need to learn to respect the law and to do the right things," said Mr Gicheru.
Mr Nduati's decision came under more scrutiny after the ministry's head of procurement, George Marete, disowned the award to Gezhouba.
The ministry admitted that its former accounting officer and the tender committee he appointed made a mistake in ignoring the report of the evaluation committee, which had pointed at Gezhouba as the lowest bidder.
On the other hand, Sinohtdro wanted the board to have the entire process cancelled and a fresh tender advertised.
The board's decision could mark the end of a dispute that undermined the relationship between Mr Wamalwa and Mr Nduati and added to the catalogue of issues that have delayed similar projects.
Gezhouba bid Sh36.9 billion for the first phase while Sinohydro Sh39.5 billion for the first phase of the project to put up a dam on the border of Kitui and Makueni counties.
Mr Nduati's decision had put the future of the project in jeopardy as the AfDB had already indicated it was not willing to cooperate without an explanation of why the lowest bidder had been rejected.
The Principal Secretary's basis was that the contractor had been barred from doing business with AfDB but the bank itself had stated that the debarment had been lifted and there was thus no problem. The bank is to foot 35 per cent of the costs of the project.
On his part, Mr Wamalwa had left it to Mr Nduati but gave dark hints about what would follow if the PS was to place an unnecessary Sh3-billion burden on the taxpayer.
He pointed out the clearance by the AG, the bank and the Ethics and Anti-Corruption Commission.
"It is even said in the Bible that Jesus asked for the cup to be taken away from him. He (the Principal Secretary) has wanted this cup taken away from him. He gave to AfDB, it has been given back to him, he gave it to the EACC, it has been given back to him, he gave it to the AG, it has been given back to him. Now he must take it," said Mr Wamalwa at a meeting with the committee.