Taxpayers risk losing Sh330 million paid to a Spanish firm for the upgrade of five stadiums whose construction stalled and bank guarantee for return of the millions expired.
The Sports ministry had in January 2018 paid Auditel Ingeniera Services Spain a 20 percent advance on the Sh1.6 billion contract for lighting, sound system and automated security access for the five stadiums and 10 training pitches.
The Auditor-General’s office reckons that the Sh330 million is unlikely to be recovered since the security guarantee offered to the government that the Spanish contractors would complete the work had expired last November.
The report further notes that no activities related to the contract had started on the ground on both the premium pitches and the training grounds.
Spanish lender, Bankinter SA Bank, had inked a deal to refund the millions in the event Auditel Ingeniera Services failed to execute the work, but the one-year guarantee period lapsed.
This has left the State to pursue the Spanish contractors who could cite the government for breach of contract because of the cancellation of the stadium works.
“In view of the foregoing, there is risk of not recovering advanced amount of Sh330,537,997 as the security guaranteeing the amount had expired and had not been replaced,” said the Auditor-General in an audit report.
“It is also not clear when and if the project will be completed considering that the funding was withdrawn by the National Treasury.”
The Cabinet had in September 2017 approved a supplementary budget of Sh4.2 billion for the upgrade of the stadiums and hosting of the African Nations Championship (Chan)—which was set for last year.
Kenya failed to host the event after the Confederation of African Football (Caf) stripped the country of the hosting rights due to the poor state of sports facilities.
The tournament was then hosted by Morocco, forcing the Treasury to withdraw funding that ultimately stalled the upgrade of the stadiums.
The five premium pitches targeted for overhaul were Moi International Sports Centre- Kasarani and Nyayo National Stadium in Nairobi, Kinoru Stadium (Meru), Kipchoge Keino Stadium (Uasin Gishu), and Kenyatta Stadium in Machakos.
However, lack of seriousness on the part of Sports Kenya which supervised the works, saw some of the projects abandoned along the way while other works are yet to start despite payments being made.
Auditel Ingeniera Services Spain was expected to design, supply, test and commission security, access control, communications, audiovisual and pitch lighting systems. The works were to be completed within four months or April 2018.
However, as at April 12, 2019, it was revealed by the auditors that the contractor had only presented designs for the contracted works to Sports Kenya.
This echoes the Kimwarer and Arror dams scandals where the Treasury made advance payments of Sh19 billion.
Italian construction company CMC di Ravenna was contracted to build the two non-existent dams. No land where the dams were meant to be built was acquired.
Despite the country losing the rights to host the continental football championship, the Treasury promised that the Sh4.2 billion upgrade of the stadiums would continue.
Suspended Treasury Secretary Henry Rotich had in October 2017 told Parliament that contracts for the construction of the stadiums had been signed and therefore the Sh4.2 billion set aside in the supplementary budget would not be reallocated.
But the Auditor-General’s office reckons that the funding was withdrawn and reallocated to other ministries.
Caf mentioned three reasons that led its committee to strip Kenya of hosting rights of the 16-team competition. Poor stadiums was top on the list.
The African football body also accused Kenyan officials of being untruthful in the course of their preparations, thereby prolonging their decision making process. It also cited political events in the country.
Kenya lost hosting rights of the continent’s second tier football tournament in a period when it was preparing for the second presidential vote.
The Supreme Court annulled the re-election of President Uhuru Kenyatta on September 1 2017, citing irregularities and illegalities in the transmission of results and ordered a repeat election within 60 days.
Opposition leader Raila Odinga, who petitioned against Mr Kenyatta’s win, did not participate in the re-run that was held on October 26, upping political tensions.