Completion of the tender process for the extension of an oil pipeline from Kenya to Uganda has been suspended due to a petition against the process, state-owned The New Vision reported on Tuesday.

The Kenyan Public Procurement Complaints, Review and Appeals Board issued the suspension notice after a petition from East African Petronet Consortium, one of the bidders.

The notification was addressed to Kenya's permanent secretary in the Energy Ministry, who along with his Ugandan counterpart, chair the Joint Coordinating Commission on Pipeline Extension.

"Under the Exchequer and Audit (Public Procurement) Regulations 2001, no contract may be signed between the procuring entity and the tenderers awarded the contract unless the appeals have been finalized," the notice said.

Under procurement regulations in both countries, once a petition is filed against a project, it is suspended until the matter is resolved.

However, Uganda's energy permanent secretary Kabagambe Kaliisa was quoted as saying that the evaluation continued and they were making clarifications and administrative reviews.

"We usually encounter such problems when we call for tenders. If complaints are being heard, it is not new. This is a joint tender. We have guiding principles, which is the law," Kaliisa said.

Financial documents for China Petroleum Pipeline Engineering Corporation, Tamoil East Africa Ltd. and MISA Incorporation/Shell Uganda Ltd. were being evaluated in the final stage of getting the winner from the original 23 applicants.

Petronet's complaint arose over a decision by the Joint Coordinating Commission to exclude it from the technical evaluation stage even after it had posted a 400,000-U.S.-dollar cash bond.

Petronet also objected to the evaluation committee's decision not to evaluate tender documents it submitted in 2004 that enabled it to be short listed for the final bid and a decision to sideline M/S Nexant, a global firm retained by the Joint Committee to prepare a feasibility study.

Construction of the 320-km oil pipeline which is supposed to be operational by late 2007, is supposed to start in August this year. However, the process has been beset by hiccups due to the dual country nature of the project.

When complete, Uganda expects to save much on the costs it incurs on transporting oil from the Kenyan oil refineries using trucks.

Source: Xinhua