Ouko cites bias in Sh8.9bn Utalii college tender award

The award of Sh8.9 billion contract for the building of the controversial Ronald Ngala Utalii College in Mombasa was skewed in favour of the contractor, the latest audit report says.
Auditor-General Edward Ouko says despite the contract being awarded to the third lowest prequalified bidder, taxpayers were tied to paying undetermined interest charges on late payment as well as advancing the contractor 10 per cent of the contract sum. Mombasa-based M/s Mulji Devraj and Brothers won the tender.

“The contract provides for interest charges on late payment and an advance payment of 10 per cent before commencement of works thus the contract was flawed in favour of the contractor,” he said in a report tabled in Parliament on October 25, last year.

Mr Ouko said he could not ascertain why the contract was not awarded to the lowest bidder — M/s China Jiangxi International K Ltd — since there was a material deference of Sh498.7 million yet all bidders had undergone evaluation and prequalification.

The audit comes amid ongoing investigations by the National Assembly Public Investment Committee (PIC) on the controversial award of the contract.

The committee chaired by Eldas MP Adan Keynan is investigating how the project, initially approved by the Cabinet in September 2008 at a cost of Sh1.94 billion was escalated to Sh8.96 billion and later scaled down in August 2014 to Sh4.9 billion.

“However, no Cabinet approval has been availed to confirm this revised scope of the project,” he said.

Mr Ouko said as at March 2016, the certified gross value of work done together with advance payment, materials on site plus actual claims was about Sh1.61 billion, representing 32.7 per cent completion.

He said the total payments made in respect to the project so far amounts to Sh3.2 billion while the interest accrued on the payments as at April 18, 2016 amounted to Sh877,897,530.

Mr Ouko questioned the tender for consultancy services that was awarded to Baseline Architects Limited, which has since been paid in excess of Sh565.3 million.

He said the award was based on the technical proposal submitted by the winning firm that was to be invited for negotiation on the basis of scale of fees for professional services.