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Economy

Auditor raises red flag over Pattni’s Sh4bn KAA claim

Businessman Kamlesh Pattni. FILE PHOTO | NMG
Businessman Kamlesh Pattni. FILE PHOTO | NMG 

Controversial businessman Kamlesh Pattni’s firm leads a list of companies that have slapped the aviation regulator with a compensation bill of Sh5.6 billion that the Auditor General has flagged as a high risk.

Auditor- General Edward Ouko has warned the Kenya Airports Authority (KAA) of “a high risk of liability before the cases are heard and determined.”

Mulolongo Brothers Association is seeking to be paid over a botched land deal. Another firm wants compensation for provision of airport buses whose contract was cancelled after President Uhuru Kenyatta said it was inflated.

Mr Pattni, who owned the Diplomatic Duty Free / World Duty Free shops at Jomo Kenyatta International Airport in Nairobi and Moi International Airport in Mombasa is claiming Sh4 billion that was awarded by an arbitrator for which KAA has appealed.

In addition, Mr Pattni is seeking Sh290 million relating to legal suits involving KAA and the Diplomatic Duty Free Ltd/World Duty Free.
The authority terminated his contract to run the Duty Free shops.

“There is also an amount of Sh1,357,550,000 for a plaintiff claiming ownership of property LR No. 13512 in the name of Mulolongo Brothers Association,” Mr Ouko said in his latest audit of KAA books of accounts for the year to June 2016.

Relief and Mission, the firm that supplied the controversial buses, has slapped KAA with a claim of Sh35.4 million after the termination of the Sh11 million per month contract.

“Included in Note 50 of the financial statements is a claim from Relief and Mission pending invoices for apron buses amounting to Sh35,431,272 after termination of the contract in public interest for which the authority has been served with a claim for unpaid concession fees and damages,” Mr Ouko said.

KAA cancelled the controversial procurement of five buses by KAA as well as seven other special buses, which ferried passengers from the lounges to the planes.

President Kenyatta blew the whistle on the tender when he questioned the $120,000 deal, saying the monthly payments of Sh11 million were excessive.

The KAA board terminated the contract despite Relief and Mission Logistics importing five buses to operate passenger shuttle services between the apron and the planes.

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