The contractor who was to undertake the ambitious Greenfield terminal at the Jomo Kenyatta International Airport (JKIA) was paid Sh4.31 billion without undertaking any work, before the project contract was terminated.
The loss of taxpayers’ billions was revealed by the Kenya Airports Authority (KAA) when its management appeared before the National Assembly’s Public Investment Committee yesterday.
The committee was shocked to hear that the contractor, M/S ACEG-CATIC JV, who landed the lucrative tender for what was to be one of the Vision 2030 flagship projects, got the payment before starting construction of the mega project that was to cost Sh65.4 billion.
The money was supposed to be recovered in subsequent progress payments, with the deal firmed and secured through an advance payment guarantee. However, this recovery never materialized because the 2011 contract was terminated in 2016 without the project taking off despite its much-publicized groundbreaking ceremony.
The KAA management was taken to task to explain how it would recover the money, even as Managing Director Jonny Andersen admitted that it was a ‘very complex’ affair.
According to the Standard, Project consultants Louise Berger, incorporating Runji and Partners, were paid Sh129 million, money which also went down the drain with the termination of the contract for the project that would have ended up as the country’s second largest infrastructure investment after the Standard Gauge Railway.
“The Sh4,310,901,805 was paid to the contractor as part of the advance payment as provided for in the contract agreement. The same was to be recovered by offsetting from subsequent progress payments, while Sh129.9 million was paid to the consultants for project supervision and design review fees, which was contractually payable on time basis,” said Andersen.
Committee chairman Abdulswamad Nassir said it was shocking that such a colossal amount could have so easily gone down the drain, even as he warned that the committee would investigate further to establish if there was any collusion to swindle taxpayers through the project.
“This is a matter that we will certainly dig deep into… because while the contract was terminated, how does KAA recover the Sh4 billion? We will also have to interrogate a number of people, including some of our colleagues, who could know more about this loss,” said the Mvita MP, as he revealed that Kipipiri MP Amos Kimunya was in charge of Transport ministry when the project was terminated.
The committee was also shocked to learn that KAA spent Sh75 million for the groundbreaking ceremony that was presided over by President Uhuru Kenyatta on May 23, 2014, sparking a flurry of questions on what the money was spent on.
“How can a groundbreaking cost Sh75 million? Was there a building that was being constructed here?” Nassir asked.