James Momanyi @jamomanyi
Two top officials of Kenya Pipeline Company (KPC) angered Senators yesterday over inconsistent statements about money to be paid to a contractor for project delays.
Managing Director Joe Sang and Chairman John Ngumi drew the ire of Senate Energy committee after they openly gave conflicting amounts ought to be paid to a contractor for operational delays in the building of a new pipeline from Mombasa to Nairobi.
Sang initially told the committee that the contractor, Zakhem International Construction had billed the corporation Sh18.9 billion for the five Extension of Time (EoT) valuations, which was partly caused by the firm, consultant to the project and the contractor.
However, he said the corporation disagreed with the amount and sought the services of an arbiter, Nyara Consultants to review the claims by Zakhem.
Sang said, Nyara Consultants reviewed the total cost of the five EoTs that delayed the project to Sh4.4 billion, an amount he said, when they appeared before the committee, that KPC will pay once negotiations and consultations with relevant authorities are complete.
However, Ngumi shot up and informed the committee that the correct amount that is supposed to be paid to the contractor for project delays is Sh2.8 billion because the review conducted by Nyara Consultants realised that Sh1 billion of the Sh4.4 billion claim had already been given through normal payments.
He said another Sh600 million had been paid to the contractor as tax for the supplies to the project, when in actual sense, the National Treasury had given tax exemptions for materials imported for use at the project.
“Ordinarily, if we were to tell the management to pay for these claims from the contractor, we would ask them to pay Sh2.8 billion,” Ngumi said. The revelations forced Narok Senator Ledama ole Kina to put to task Sang and Ngumi for giving conflicting figures.
Sang later owned up and agreed with the chairman that in case Zakhem was to be paid for the work delays, they will receive a net pay of Sh2.8 billion as it had already received Sh1.6 billion.
The KPC managing director told the committee that KPC was partly at fault for the delays because of a court case which delayed construction by six months after the tender was awarded.