Economy

GDC blocked audit information on Sh1.7bn rig-moving deal

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Auditor-General Edward Ouko. PHOTO | EVANS HABIL

The Geothermal Development Company (GDC) denied Auditor-General Edward Ouko information regarding a legal threat by a firm that was contracted to provide rig mover services at a cost of Sh1.7 billion.

Mr Ouko said the contractor had threatened GDC with litigation following its decision to stop contracted services when the Ethics and Anti-Corruption Commission (EACC) launched investigations into the procurement of the contract.

The GDC signed a contract with Bonfide Clearing and Forwarding Limited in 2012 to move geothermal rigs and other equipment in 40 lots with each costing Sh42 million within a distance of 11 kilometres, bringing the worth of the entire deal to Sh1.7 billion.

“At the time of concluding the audit, the contract was under investigation by the EACC for possible irregularities.

Available information indicate that following the EACC queries over the contract, the company’s management stopped the usage of the contracted services resulting in the contractor threatening to commence legal proceedings against it for breach of contract,” Mr Ouko said in his report on GDC books of accounts for the year to June 2015.

“I did not receive all the required confirmations from the company’s (GDC) legal representatives of threatened litigation claims against GDC and thus was unable to verify the completeness of the reported liabilities and contingent liabilities,” he said in a report dated July 5, 2016 and tabled in Parliament on Tuesday.

Mr Ouko said under the circumstances, he was unable to confirm whether the revised contract between the GDC and the firm provides value for money for the geothermal generator.

Bonfide Clearing and Forwarding, is also said to have charged electricity generating company KenGen Sh20 million in 2011 for a similar contract covering a longer distance of 15 kilometres.

The EACC has since recommended the prosecution of the former GDC director Silas Simiyu over the award of the tender.

Mr Ouko said the GDC entered into the contract on May 4, 2011 for 12 rig moves covering a period of one year at a rate of Sh19.5 million per move of estimated 50 loads.