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KAA takes Sh1.1bn hit in Nanyuki Airstrip works deal

airstrip

Planes parked at the Nanyuki airstrip. Photo | FILE | NMG

A contractor has hit the Kenya Airports Authority (KAA) with a Sh1.1 billion bill after the agency terminated a contract for rehabilitation of an airstrip in Nanyuki.

The KAA terminated the contract for the rehabilitation of the runway, apron and car park at Nanyuki Airstrip it awarded Doch Company on September 3, 2014. Doch was to finish the Sh398,950,970 job within 12 months.

Work on the project commenced on November 24, 2014 with an expected completion date of November 23, 2015.

But an audit of the KAA’s books found that the contractor early this year made a claim of nearly a billion shillings in what it says are costs related to the termination of the contract.

“A review of the project file revealed that the contractor placed a claim of Sh955,275,371 for idle equipment and other costs related to contract termination through a letter dated January 24, 2018 but there was no evidence to show that the management responded to this claim,” Edward Ouko, the Auditor-General, says in a qualified audit report of the KAA for the year ended June 2017.

Mr Ouko says the contractor, through its advocates Zed Achoki & Company, has placed another demand of Sh120,610,876 for the temporary runway, which is about 30 per cent of the contract sum and above the allowed limits.

The audit report says a review of the project file and related records found that the tender committee sitting on November 12, 2015 approved a nine-month extension that brought the revised completion date to August 22, 2016.

“A review of the last progress report dated July 21, 2016 showed that the overall progress was at 42 per cent with less than a month left to the end of the revised contract period, an indication that the project was behind schedule,” the report says.

Besides, a consultative meeting held on November 12, 2014 concluded that phasing out of works on the runway would pose safety challenges and recommended construction of a temporary one to allow rehabilitation works to proceed without interference with airstrip operations.

Mr Ouko says site instructions for construction of the temporary runway and its cost estimation were not in the project file.

“The employer also did not respond to the contractor’s letters requesting a determination of applicable rates for this work as the rates used in the contract sum could not apply since this was new scope of works,” the report says.

The audit also found that there was no evidence showing whether the additional scope was presented to the tender committee for approval or how the concerns of the contractor on the applicable rates were addressed.

But in a letter dated June 15, 2015, the contractor gave a notice of completion of the temporary runway and indicated that part of it was to be handed over for use on June 17, 2017 and the remaining section was to be completed on July 30, 2017.

“There was, however, no correspondence showing that the temporary runway was completed or if it was inspected and approved for use,” Mr Ouko says.

TheKAA’s acting general manager (Engineering Services) wrote to the contractor a letter dated February 28, 2016 indicating that the temporary runway was in bad state and needed repairs. “This notwithstanding, an amount of Sh142,697,378 had been paid to the contractor by June 30, 2017,” the report says.

Separately the audit has questioned the award of Sh819.3 million contract for rehabilitation of Wajir International Airport (runway, taxiways, apron and access road) without requisite budgetary allocation.

The KAA awarded Halane Construction Co. Ltd the contract on December 17, 2016 based on a budget allocation of Sh250 million from the airstrip funds investment income and the balance was to be provided for under the supplementary budget for 2016/17.

But on December 21, 2016, the principal secretary in the Ministry of Transport wrote to the KAA managing director advising him to stop the project due to budgetary rationalisation that was expected to affect other priority projects.

The project was subsequently terminated but M/s Halane Construction successfully challenged the termination at the Public Procurement Administrative Review Board and the board directed the authority to award the tender.

Mr Ouko says the management did not satisfactorily explain why no appeal was made against the ruling.