Haji targets top KPC, NHIF staff in graft war

More heads are set to roll at two State corporations as detectives go for the top managers this week, the Director of Public Prosecutions (DPP) Noordin Haji disclosed yesterday.

Haji told a Senate committee that investigations had been completed on corruption-related crimes at the Kenya Pipeline Company (KPC) and the National Hospital Insurance Fund (NHIF). 

Sources indicate that about 30 top managers in the State corporations face arrest.

“We are going to prosecute high ranking officials at NHIF and KPC soon,” Haji told members of the Senate Legal, Justice and Human Rights committee.

Siphon money

KPC managing director Joe Sang was forced out of office this week following a protracted war with the board. Suspended NHIF managing director Geoffrey Mwangi and the finance director Francis Kurgat were last week arraigned before court where he was charged with subverting justice by blocking investigators from accessing documents from the Fund.

Detectives have been investigating how Sh6 billion was misappropriated at NHIF, with some executives engaged in grand real estate developments in Nairobi’s more expensive suburbs.

National Assembly’s Public Investments Committee is also of the view that the management of KPC colluded with the contractor to siphon money from the corporation.

KPC management has been on the spot over the award of a tender for the construction of the Mombasa-Nairobi line 5 project.

Detectives have placed special focus on the awarding of the most lucrative tender to Zakhem International, a Lebanese firm, to build a new pipeline in 2014 at nearly Sh48 billion — yet the contract price has been adjusted upwards by at least Sh2.7 billion.

While the initial project sum was Sh48 billion, the contractor has returned to demand a further Sh208 million. Zakhem International has been demanding Sh4.4 billion penalty for delays in building the 450km pipeline.

Sang confirmed when he appeared before the committee that Zakhem International had slapped them with an extra Sh5 billion claim for delays in completing the project.

Details of the loan agreement make it mandatory that the money be paid quarterly, meaning that KPC has to part with some Sh1.34 billion quarterly.

Sang and board chairman John Ngumi have been at logger heads on the Mombasa-Nairobi line 5 project, which has prompted to the latter’s sacking.

Losses and debts

Fiscal impropriety of huge proportions have been  crippling KPC with massive financial losses and debts linked to tendering, oil spillage and opaque dealings, among other vices.

Ngumi claimed that the agency under Sang has underperformed, hence  the losses and debts.  

When he appeared before the Senate Energy Committee, Ngumi said the board was in the dark in all the multi-billion-shilling tenders currently being investigated.

Investigators have already opened a probe into what some sources say could be the country’s biggest corruption scandal at  KPC, allegedly  involving Sh70 billion.

The investigation is centered on claims of hugely inflated costs for procurement deals undertaken by the firm in recent past.

Last month, the board stopped the management from paying a consultant Sh3.8 billion.

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