Rubis Energy Uganda wins a USD17.3 mn deal to supply heavy fuel oil to UEGCL’s Namanve thermal power plant

Rubis Energy Uganda Limited has won a USD17,296,320.5 tender to supply Heavy Fuel Oil (HFO) for the Namanve Thermal Power Plant. The plant is run by Uganda Electricity Generation Company Limited (UEGCL).

This follows The Public Procurement And Disposal Of Public Assets Appeals Tribunal’s dismissal of an appeal by Maxol Uganda Limited, one of the unsuccessful bidders. 

Maxol had appealed against Rubis Energy being declared the best-evaluated bidder. Maxol’s bid was rejected because its proposed HFO presented a net calorific value of 40,483 KJ/kg and a gross calorific value of 42,103 Kj/kg, yet the bidding document required a net calorific of min 40,585 KJ/kg and gross calorific value of min 43,100 KJ/kg using the ASTM D 4868 test method.

Maxol first challenged the award to Rubis via an administrative review process that was dismissed by UEGCL over “being devoid of merit”. Maxol then appealed to the PPDA Tribunal on February 6, 2023, seeking to review the decision of UEGCL. 

In their appeal, Maxol argued that although its offered net calorific value of 40,483 KJ/Kg, was lower than the required 40,585 KJ/Kg, this was not substantial enough to fail their bid. They also argued that its bid was substantially responsive and had the lowest priced bid of USD 15,133,007.2320 as opposed to the best-evaluated bidder’s price of USD17,296,322.69. 

In its written defence, UEGCL told the Tribunal that the minimum net calorific value was informed by the requirements of the Power Purchase Agreement between UEGCL and the Uganda Electricity Transmission Company Limited for the sale of the net electrical output generated from the Namanve Thermal Power Plant to Uganda Electricity Transmission Company Limited (UETCL) and the Generation and Sale Licence No ERA/LIC/GEN/021/209 for the generation and sale of electricity generated at the Namanve Thermal Power Plant issued to it by the electricity industry regulator, the Electricity Regulatory Authority.

UGCL further “asserted that the Lower Heating Value (LHV) approved by the Electricity Regulatory Authority for the monthly energy payments under the terms and conditions of the Power Purchase Agreement is indicated as 40,585Kj/Kg and that informed the drafting of specifications and thresholds indicated in the Solicitation Document”. 

Any deviation from the Power Purchase Agreement and the Generation and Sale Licence conditions would expose UEGCL regulatory sanctions in the form of monetary fines or revocation of the Generation and Sale Licence, with the ripple effect of halting the operations of the Namanve Thermal Power Plant, UEGCL further said. UEGCL also further avowed that calorific value is a material and vital property of fuel because it determines not only the efficiency of the fuel but also the amount of energy released by the combustion of the fuel. 

UEGCL further told the Tribunal that Maxol’s bid having been found to be non-responsive and substantially non-compliant at the technical evaluation stage, rendered a further financial evaluation and comparison with other responsive bids an unnecessary exercise and illegality.

However, Maxol’s application could not be heard to its full conclusion as it was dismissed by the Tribunal, over having been filed out of time. 

“The digest of our findings is that the instant application lodged with the Tribunal on February 6, 2023 was therefore filed out of time set by law and is incurably defective and incompetent,” ruled the Tribunal, adding: “In the result, there is no need to delve further into the merits of the application”. 

“The Application is struck out. The Tribunal’s suspension order dated February 6, 2023, is vacated,” concluded the tribunal presided over by Geoffrey Nuwagira Kakira; Thomas Brookes Isanga; Paul Kalumba; Charity Kyarisiima.