10 July 2014

Kenya: Energy Team Probes Sh43 Billion KPC Project

The Sh43 billion Kenya Pipeline enhancement project from Mombasa to Nairobi has attracted parliamentary interest. Just a day after the National Assembly Public Investments Committee grilled the top management of the Kenya Pipeline Corporation over the tender procurement process, yesterday it was the turn of the Energy Information and Communications Committee.

The committees are investigating the cost of the project and how the tender was awarded to Zakhem International Construction, a Lebanese firm. KPC's top bosses led by managing director Charles Tanui defended the decision to award the tender to Zakhem before the Energy committee chaired by Kigumo MP Jamlek Kamau.

Tanui repeated his earlier position that the decision was above board even after admitting that the tender committee had used unauthenticated testimonials to carry out due diligence before awarding the contract.

The two House committees want to establish whether the deal was clean just days after the Public Procurement Review Board gave the contract the go ahead.

Committee members Nicholas Gumbo (Rarieda), Junet Mohamed (Suna East), Roba Duba (Moyale) and Richard Tong'i (Nyaribari Chache) took the KPC managers to task over whether they had carried out due diligence on Zakhem before awarding the tender.

"The claims of impropriety came up several times and the matter was canvassed at the PPOA review board, which found that there was insufficient evidence to prove the allegations," KPC legal officer Gloria Khafafa said.

She was responding to allegations that Zakhem had been blacklisted in seven African countries, among them Ghana, Nigeria and Liberia, over fraud. Junet asked if Zakhem is the same firm that did the 1972 project of the current pipeline, which is being replaced.

He said there is a possibility Zakhem may be a Kenyan firm. Junet also wanted KPC to confirm if the firm had done any other work in the country since the 1970s.

Tanui said Zakhem successfully constructed the current Nairobi-Eldoret line in 1992. The committee also took KPC to task after it emerged that one of the companies that had lost the bid, China Wu Yi, had confidential documents relating to the tender.

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