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Economy

Knec risks lawsuit for terminating Sh1.49bn new offices contract

Edward Ouko
Auditor-General Edward Ouko. FILE PHOTO | NMG 

The Kenya National Examinations Council (Knec) risks legal suit over the termination of Sh1.49 billion contract for completion of New Mitihani House whose works have been going on for the last 30 years.

Auditor-General Edward Ouko says the exams council terminated the contract for Phase VI awarded to M/s Ongata Works Limited in 2013 after paying Sh818.4 million to the contractor.

He said the works stood at 59 per cent level of completion and management had terminated the contract as at March 10 this year.

“As at June 30, 2018, the council had paid Sh818,379,878 net retention while certified works stood at Sh891,303,752 representing 59 per cent of the original contract sum.

“It is not clear and the management has not explained the mismatch between certified level of works and level of completion of the project,” said Mr Ouko.

In addition, he said, with the cancellation of the contract, the Knec risks legal suit from the contractor and this may further delay completion of the project.

“Management has not provided a roadmap on how it intends to complete the project. In the circumstances, the delays in completion will lead to cost escalation and stakeholders may not get value for their resources if this project is not completed and put to its intended purpose,” Mr Ouko said in a qualified audit opinion Leader of Majority Aden Duale tabled in Parliament last week.

Delayed payments

Mr Ouko said further examination of payment records for the project revealed a payment of Sh104,124,834 in respect of certificate number 26.

He said included in the payment is Sh57 million being interest on delayed payments of certificates presented to the Council by the project manager.

“No satisfactory reason was availed (Sic) by management for the delayed payment of certificates resulting into these penalties,” said Mr Ouko.

He said had the Knec paid the certificates on time, the interest charged on the delay would have been avoided and in the circumstances, the council engaged in payment of avoidable costs of Sh57 million and value for money may not have been derived.

The Knec has been constructing the New Mitihani House in Nairobi’s South C Estate and the works have been going on for the last 30 years.

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