Counties

Firm sues State over unpaid Sh600m award in greenhouse gas project

case3
BDgeneric_logo

Summary

  • A local company has moved to court to compel the Ministry of Environment to honour a Sh600 million pay for services rendered a decade ago in a greenhouse gas emissions reduction project.
  • In a petition filed before the High Court, BEA International says the Ministry of Environment is delaying payment, yet the money continues to attract interest at 12 percent per year.
  • Through Waweru Gatonye, the company says it entered an agreement in April 2011 for consultancy services.

A local company has moved to court to compel the Ministry of Environment to honour a Sh600 million pay for services rendered a decade ago in a greenhouse gas emissions reduction project.

In a petition filed before the High Court, BEA International says the Ministry of Environment is delaying payment, yet the money continues to attract interest at 12 percent per year.

Through Waweru Gatonye, the company says it entered an agreement in April 2011 for consultancy services.

In the deal, the company was to prepare and submit to the National Environment Management Authority (Nema) Project Idea Notes (PINS) and Project Design Documents (PDDs) for the Mau Forest Complex, Aberdare Ecosystem and greening the cities and riparian reserves and national appropriate mitigation actions.

Mr Patrick Kimani, one of the directors of the company says the PDDs were meant to demonstrate that the intended project would reduce the greenhouse gases according to the agreed standards as produced by United Nations Framework Convention of Climate Change (UNFCCC).

The company says it fulfilled its part but the ministry failed to pay the consultancy fee. The matter was later referred to an arbitrator, who ruled in favour of the company and awarded it Sh379.5 million for the breach. The government appealed against the decision but the case was dismissed in in 2018.

“Despite demands, the respondents have failed to pay the decretal sum nor honoured its promise to settle the same. It is now four years down the line, and the amount continues to accrued interest at the rate of 12 percent per annum until payment in full at the expense of innocent taxpayers,” the petition reads.

Attorney-General (AG), who defended the government in the suit, says the contract was terminated because the company failed to submit progress reports as agreed in the contract.

BEA disputes the claim saying the reports were submitted as required and blames the ministry to pay as per the agreement.

The AG faultes the sole arbitrator Mr Kyalo Mbobu for ruling that the company had substantially fulfilled its obligations and for allegedly formulating and determining a dispute that was not referred to him.