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KPC officials facing arrest over Sh660m

Top Kenya Pipeline Company (KPC) officials are among those listed as individuals of interest lined up by the anti-corruption czar to face prosecution over suspected Sh660 million theft at the corporation. 

Ethics and Anti-Corruption Commission (EACC) chief executive officer Halakhe Waqo yesterday said the commission had compiled several files on the suspects who include former senior officials.    

Waqo said he expected the officials to be arraigned in court upon clearance by the Director of Public Prosecutions (DPP). He said this when he appeared before Parliament’s Energy committee where he further revealed that the management of KPC had inflated the price of the Hydrant pit valves by 1,100 per cent over and above the selling price at the manufacturer.

In the process, the taxpayer lost Sh660 million in the deal which allegedly benefited a group of top officials at the State corporation.

Waqo told the House team that on March 31, 2015, KPC paid Sh262 million to M/s Aero Dispenser Valve which was 40 per cent of the value of the tender even though the goods were not delivered until July 14, 2015.

He said that in October 2014, KPC placed a tender to purchase 58 Hydrant Pit valves complete with isolation valves and two years’ operating spares to replace the defective ones at the Jomo Kenyatta International Airport.

The pit valves are used to refuel aircraft at the airport but the existing ones were old forcing the corporation to go for new ones.

And due to the agency of the matter, the corporation recommended  that the valves be purchased  from the manufacturer Claval Company Limited of Costa Mesa, USA, who had sold the existing ones, through direct procurement.

It was after the board reached an agreement that Claval be the sole bidder that the corporation’s tender committee during its meeting of December 9, 2014 sanctioned the direct procurement.

But in a turn of events, the following day, an officer from the Procurement Department allegedly forwarded  the tender document via an email seeking quotations from  Claval Company Ltd.

EACC later established that the said email was copied to Ms Allied Inspection and Testing Inc of Canada and not Claval.

“The email to Claval was never received in the USA as it was addressed to [email protected] and [email protected] both of which are addresses for Canada,” said Waqo.

He added that further investigations established that some top KPC officials had disregarded the tender committee and instead entered into a deal with  M/s Allied Inspection and Testing Inc to supply the equipment.

Further confusion emerged after Allied Inspection and Testing Inc. which had been appointed by Claval as its agent,  wrote to the corporation indicating that Claval had appointed yet another company, M/s Aero Dispenser Valve Ltd, a Nairobi-based company, as agent.

However, EACC found out that  the letter was a forgery and that Claval was not aware of it.

Further, Waqo said, the commission established that on diverse days  between March 2014 and July 2015 Allied Inspection and Testing Inc purchased pit valves from Claval worth Sh72 million only which included three tenders from KPC.

Waqo added that the commission had recommended to the DPP criminal charges against several top officials and was in the process of  instituting a suit against the same individuals seeking to recover  Sh200 million that was overpaid by the corporation to Aero Dispensers Valve Ltd.

Waqo told the stunned members that had KPC bought the equipment from Claval Ltd as per the justification given for direct payment, it would have obtained them at Sh59.4 million as opposed to the contract price of Sh660 million.

“The purported negotiated contract price of a 1,110 per cent more than the price of the original equipment manufacturer, Claval,” Waqo said, adding that Sh 660 million was lost in the process.

He said the corporation engaged the services of too many agents which was later found to be a plot  by  the corporation to steal.

Waqo, however, found himself on the receiving end with MPs ignoring his explanation and instead demanded to know why  the commission had taken years to complete the probe.

“The commission has been part of the conspirator used by the corrupt to defeat the war on corruption,” said Tindi Mwale (Butere).

Endebes MP Robert Pukose questioned whether the EACC, as currently constituted, was  able to fight corruption or whether it was part of the problem.

“Our worry is that the commission is part of the conspiracy on corruption. It is taking too long to finalise investigating simple cases… are you able?,” posed Pukose.

But Waqo defended the commission saying the delay in finalising the investigation had been hindered by the many obstacles including the involvement of international players.

The investigations, Waqo said, involved international cooperation and requests for mutual legal assistance to respective governments were only instituted in January 2016.”

The contract for the supply of the equipment was signed between KPC and Aero Dispenser Vale Ltd. This was contrary to the tender committee’s resolution which had recommended Claval Ltd being the original equipment manufacturer for the tendered documents.

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