Parliament has summoned a Chinese contractor over alleged inflation of the cost of renovating Kenyatta International Convention Centre (KICC) to Sh3.2 billion ahead of the Africa Climate Conference that President William Ruto hosted in September 2023.
The National Assembly’s Committee on Tourism and Wildlife heard that China Wu Yi had failed to clear Sh674.6 million owed to local subcontractors who undertook the works under the supervision of the Kenya Defence Forces (KDF).
The committee was shocked to learn from 14 subcontractors that China Wu Yi had only paid 17 percent or Sh114 million of the Sh3.19 billion that it said was the total contract sum.
The new figures differ from the Sh1.94 billion that the Ministry of Defence and the KDF said was the total contract sum for the renovation.
Already, Sh1.25 billion has been disbursed to the Ministry of Defence for payment of the Chinese contractor. The KICC management early this month transferred Sh300 million to the Ministry of Defence for onward remittance to the contractor.
This is in addition to the Sh950 million that the KDF had paid to China Wu Yi. Committee chairperson Kareke Mbiuki demanded to know the origin of the Sh3.2 billion and the involvement of the Chinese firm in paying the subcontractors.
“As a committee, we are not aware of any of the Sh3.2 billion contract sums. The information we have is that the project sum was Sh1.94 billion which we as Parliament approved,” Mr Mbiuki, the MP for Maasa said.
“We will only be able to understand it after we summon China Wu Yi and demand the provision of the original contract signed between the Ministry of Defence and the Chinese company. I direct that China Wu Yi appear before us next week.”
The 14 contractors said the former Chief of Defence Forces Francis Ogolla and Defence Principal Secretary Patrick Mariru assured them of payment immediately after they were through with the works.
“This gave us the comfort and assurance we needed to deploy all human, material and financial resources at our disposal at a very short notice to ensure delivery of the services,” Mercy Meria, the director of FloLizz Contractors Limited told MPs.
“To date, we have only received 17 per cent of our payments via China Wu Yi who also informed us in a meeting ... on March 12, 2024 that our full payments were dependent on them receiving their full payment of Sh3.2 billion.”
The local subcontractors told the committee that China Wu Yi said they had received Sh550 million of the alleged Sh3.2 billion contract.
The 14 subcontractors said they did 80 percent of the renovation work while China Wu Yi undertook 20 percent. “Our businesses are now under duress as we have been exposed to our suppliers and financiers. Some of us have received demand letters while others are on the verge of being auctioned,” she said.
The subcontractors said they were shocked to learn the project cost approved by Parliament was Sh1.94 billion and not Sh3.2 billion.
