Thika Road contractors yet to be paid Sh428m


Motorists on Thika Road. FILE PHOTO | NMG

Taxpayers risk incurring significant interests after the State failed to pay Sh428.6 million to Chinese contractors who built the Thika Superhighway, a new report shows.

Auditor-General Nancy Gathungu says the Treasury is yet to clear the pending bill, more than six years after the contract between the government and consortium of Chinese firms lapsed.

Ms Gathungu has warned that the taxpayer will be burdened with more interests and penalties if the State does not clear the repayments.

“The project is at risk of incurring significant interest costs and penalties with the continued delay in making payments,” Ms Gathungu said

She said an audit of the Kenya National Highways Authority (KeNHA) books of accounts, reflects pending bills amounting to Sh428,623,554 as at June 30, 2021. She said KeNHA attributed the hitch to delays in exchequer releases and the management committed to liaise with the Treasury for timely releases for prompt payment in the current financial year.

Ms Gathungu said the project information provided in the financial statements for audit revealed that the project was to end on July 22, 2015.

“However, the project closure report was not availed [sic] for audit review, being more than six years after the expiry of the closure period,” she said in a report tabled in Parliament.

A consortium of Chinese firms, China Wu Yi Company, Sinohydro Corporation and Sheng Li Engineering Construction bagged the Sh32 billion project to construct the first superhighway in Kenya.

The 50-kilometre, eight-to -12 lane Nairobi-Thika road was awarded in January 2009 and the three Chinese companies completed the works in 2012.

The road was funded by loans from the Africa Development Fund and China Exim Bank as well as the Treasury.

The non-payment follows revelations by Ms Gathungu that Kenya had failed to clear a Sh3.6 billion owed to a Chinese lender that was used to construct the Nairobi Southern Bypass.

The Southern Bypass was constructed by China Roads and Bridge Corporation (CRBC) using loans from China Exim Bank. KeNHA in 2012 picked CRBC to construct the four-lane dual carriageway at $180 million (Sh18 billion).

KeNHA has failed to release Sh3.6 billion in delayed payments for the year to June 2021. This is an increase of Sh726 million from Sh2.9 billion that was outstanding in 2020.

The 29-kilometre bypass allows traffic from Mombasa destined for western Kenya and Uganda to bypass downtown Nairobi for a smooth flow.

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