Emerging Supply Chain Management Practices and Procurement Performance of Public Mega Projects in the Energy Sector in Kenya

Abstract

Governments around the world face a rising demand for infrastructure. Most governments, including Kenya, are attempting mega projects to bridge the infrastructural gap. Kenya has prioritized, under the Kenya Vision 2030, a number of Mega projects. However most mega projects have, (or are), experienced procurement related challenges, which threaten their efficient implementation thereby threatening achievement the Vision 2030 aimed at transforming Kenya into a middle income Nation. The energy sector, a critical support sector of the Vision 2030 pillars, plans to increase power production by 10,000Mw by the year 2030, from the current estimated production of slightly above 2000Mw, through an array of mega projects. This study set out to examine the influence of emerging supply chain management practices: public private partnerships (PPPs), E-procurement, procurement risk management, and global sourcing; and the moderating effect of regulatory framework; on the procurement performance of Mega projects in the energy sector in Kenya. The study reviewed literature on the study variables and various models and theories: the Bensaou relationship model, the resource based view theory, Agency theory, and the Porter’s value chain analysis model; and discussed them in line with the study variables. The study entailed a census of all the 47 mega projects under the various public procuring entities in the energy sector. The unit of observation was the procurement managers in the procuring entities dealing with mega projects. Objectively developed questionnaires were used to collect primary data. The data collected was sorted, coded and entered into the computer statistical package (SPSS), for production of descriptive and inferential statistics. Using regression analysis to test the null hypotheses that: Emerging supply chain practices do not have significant influence on procurement performance of mega projects in the energy sector in Kenya; the study found that emerging supply chain practices: Public Private Partnership, E-procurement, Procurement Risk Management, and Global Sourcing; have a positive significance influence on procurement performance of mega projects in the energy sector in Kenya. Regulatory framework does not have a significant moderating effect on procurement performance. This study thus recommends enhancement of efforts to adopt public private partnerships in the acquisition of mega projects. Also, the study recommends a broader, integrative adoption of E-procurement, beyond the shallow application of online advertisement of bids and emails. The study recommends continued adoption of risk management practices in the procurement process. The study further recommends the need to review the procurement process of mega projects with a view of enhancing the procurement mechanism to collect all relevant data for contractor evaluation process. Additionally, there is need to sustain the global sourcing practice in acquisition of mega projects in the energy sector to sustain the quality, price, and technological benefits that accrue.