Balala says Cabinet didn’t approve new Utalii college

The Cabinet did not discuss or approve any memo sanctioning the construction of the controversial Ronald Ngala Utalii College in Kilifi at a cost of Sh10.4 billion, Tourism minister Najib Balala told Parliament Wednesday.

Mr Balala told the National Assembly’s Public Investments Committee (PIC) that the Sh8.9 billion project has so far consumed Sh4.1 billion on the 35 per cent work done.

“The so called Cabinet memo, signed between Treasury secretary Henry Rotich and then Tourism minister Phylis Kandie in 2014 has not been approved,” Mr Balala said, adding that the Cabinet office had confirmed that the memo that the Tourism Trust Fund relied on to award the multi-billion shilling project had not at any time been slotted for deliberation.

Mr Balala revealed that the Tourism Trust Fund management rushed through the tendering process and executed it despite the existence of a Cabinet moratorium stopping the award of tenders worth more than Sh500,000.

MPs took Mr Balala to task as to why the project was conceived without a feasibility study and Cabinet approval.

PIC is investigating how the project costs escalated from the original Sh1.9 billion budget to Sh8.9 billion before it was later scaled down to Sh4.9 billion.

PIC insisted that it was the responsibility of Parliament to decide the project’s fate and demanded to know from the minister what action has been taken against Tourism Trust Fund managers who authorised its execution.

Mr Balala distanced himself from procurement of contractors for the project, insisting it was awarded after he was sacked from the ministry in 2012.

The minister said procurement for the project was also done in the absence of the board of trustees, which was disbanded one month after he left office.

“After I left the ministry in March 2012 there was no board. The tender was awarded in April 2013 and the variation of costs done in April 2014. The Tourism Trust Fund had no board from 2013 to October last year,” Mr Balala said.

He said when he returned to the ministry in December last year, the issue of Ronald Utalii College was not brought to his attention until last month.

“When I realised that there were serious problems affecting the project in April this year, I ensured that President Uhuru Kenyatta appointed Henry Kosgey as chairman of the fund before we sacked individuals involved in inflating the project cost,” he said.

The ministry has since instituted a forensic audit on the project to be undertaken by the Kenya National Audit Office.

“We know that money has been paid to consultants to the tune of Sh1.3 billion or 16 per cent of the Sh8.9 billion contract even before the project started,” he said.

Mr Balala said he could stop disbursement of funds to the Tourism Trust Fund, but the agency’s board must henceforth manage spending on the project.

READ: Sh1.2bn set aside for construction of tourism university

He was forced to throw out acting Tourism Fund chief executive officer Joseph Cherutoi before the hearing began after learning that he had interfered with witnesses who testified before PIC.

Mr Balala took the unprecedented decision after PIC chairman Adan Keynan and Kiminini MP Chris Wamalwa accused the CEO of sabotaging the investigations by coaching witnesses and denying PIC crucial documents.

“This is the first time I am hearing that Mr Cherutoi has interfered with witnesses. I would ask him to go back to his office. He is as good as irrelevant sitting here. I have all the relevant information and I don’t need his assistance. Interference with witnesses is a serious matter and I will deal with it internally,” Mr Balala said, prompting the CEO who had accompanied the minister to walk out of the meeting room.

Mr Balala asked Parliament to guide the ministry on the way forward, saying stopping payments for the project will result in huge penalties, accrued interest and its abandonment by the contractors.

Mr Keynan directed Mr Balala to ensure that Kenyans get value for money even as he warned that the government was likely to spend more than Sh13 billion on the project given the consultant’s estimation that 20 per cent of it has been completed at a cost of Sh4.1 billion.

Baseline Architects Limited, the consultant hired to supervise the project, told PIC on Tuesday that it had been paid Sh850 million for consultancy services despite the work done standing at a lowly 20 per cent.

Dominic Otengo, the Baseline Architects director said the contract with Tourism Trust Fund allows him to be paid in advance.

PIC also interrogated Charles Okeyo, who chaired the tender committee that awarded the contract to the contractor M/s Mulji-Devraj & Brothers, and Eden Odhiambo, who chaired the tender committee for consultancy services.

Mr Odhiambo told MPs that the Tourism Trust Fund had a budget of Sh1.9 billion at the time of awarding the consultancy contract, but could not explain how the tender committee arrived at the figure given the letter of award did not quote any sum.