Auditor questions Sh4.3b payment for stalled project

A contractor  for the stalled multi-billion-shilling Greenfield Terminal  project at the Jomo Kenyatta International Airport was paid Sh4.3 billion even though the project was later discontinued. The money was not refunded and no explanation was given as to why the huge amount was paid for work not done.

According to a report by Auditor General Edward Ouko, the Kenya Airports Authority (KAA) paid a further Sh129.9 million to the consultant of the project but there was no evidence of work done. KAA, Ouko says, spent Sh75 million for ground-breaking but no work was undertaken.

But appearing before the Public Investment Committee (PIC), KAA management led by the managing director Jonny Anderson said the money was paid to the contractor as part of advance payment as provided for in the contract agreement. The same was to be recovered by offsetting from subsequent progress payments and that the payment was secured by the Advance Payment Guarantee.

Anderson told the committee chaired by Mvita MP Abdulswamad Nassir that Sh129 million paid to Louise Berger Incorporating Runji and Partners for project supervision and design review fees which was contractually payable on time basis.

Defending the Sh75 million expenditure for the ground breaking, Anderson said the approval was obtained to appropriate funds from the contingency provision of the project.

Ouko also notes in the report that the final contract was to be executed only after financial negotiations with an identified financer were concluded.

The New Greenfield project was awarded to ACEG-CATIC JV at a contract sum of $653,782,814 (Sh65.3 billion). The project was to be a new terminal building of 8.7 million capacity passengers per annum and floor area of 178,000sqm.

Once completed it was  to have 50 international and domestic check positions, 32 contact and eight remote gates, associated apron with 45 stands and linking taxiways.  KAA stopped the project in March 2016, citing “operational, economic and financial dynamics”.

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