The Kenya National Highways Authority (KeNHA) incurred a loss of Sh132,355,490 in interest on late payments to contractors.
The National Assembly’s Public Investment Committee (PIC) says the authority would have avoided the unnecessary expenditure had it paid the contractors’ on time.
KeNHA also incurred interest of Sh2,594 567 and Sh4,780,516 due to late payments relating to Kaloleni-Kilifi Road and Magumu–Njabini Road in the year 2013/2014, among others.
The Kenya National Highways Authority (KeNHA) incurred a loss of Sh132,355,490 in interest on late payments to contractors who worked on major highways in the year to June 2015.
The National Assembly’s Public Investment Committee (PIC) says the authority would have avoided the unnecessary expenditure had it paid the contractors’ on time.
“The committee recommends that the authority should pay its development bills in time to avoid interests accruing from delayed payments and financial claims,” PIC chairman Adan Keynan says in the 21st report on audited books of accounts for State corporations.
“The authority incurred the following nugatory expenditure — interest charges of Sh23,273,277 paid to the contractor for delayed payment relating to Nairobi — Addis Ababa Road (Marsabit–Turbi Road), interest charges of Sh33,144,940 paid in respect of delayed payment relating to rehabilitation of Kericho-Mau Road section and Sh59,032,806 yet to be paid in respect of delayed payment relating to rehabilitation of Nyamasaria-Kisumu-Kisian Road,” Auditor-General Edward Ouko told PIC.
“The expenditure would have been avoided had the payments been made in good time.”
KeNHA also incurred interest of Sh2,594 567 and Sh4,780,516 due to late payments relating to Kaloleni-Kilifi Road and Magumu–Njabini Road in the year 2013/2014, among others.
Peter Mundinia, KeNHA director-general, said:“Inadequate budgetary provisions coupled with delayed exchequer releases have always led to interest on delayed payments for all development projects. Interest on delayed payments is actually provided in the contract development.”
