The Kenya National Examinations Council (Knec) is once again on the spot over its failure to complete its headquarters New Mitihani in South C, Nairobi, which has been under construction for the last 30 years.
Auditor-General Edward Ouko in a report tabled in National Assembly says the decision by the council to terminate the contract for the new contractor will cost taxpayers more money.
Mr Ouko said the contract was awarded to M/s Ongata Works Limited in 2013 at a contract sum of Sh1.49 billion for 78 weeks but was later extended to March 10, 2017, but the work stalled at 59 per cent completion, forcing the management to terminate the contract.
“As at June 30, 2018, the council had paid Sh818.3 million net of retention while certified works stood at Sh891.3 million representing 59 percent of the original contract sum,” says Mr Ouko.
The council is yet to disclose the new contractor.
The Auditor General said the management did not explain the mismatch between the certified level of works and level of project completion.
“In addition, with the cancellation of the contract, management risks legal suit from the contractor and this may further delay the completion of the project,” said Mr Ouko.
He said the Knec did not provide a road map on how it intends to complete the project.
Mr Ouko warned that the delays in completion would lead to cost escalation and stakeholders may not get value for their money.
The council is also on the spot over delay in payment for certificates from the project manager.
The council paid Sh104 million for certificates but out of these, Sh57 million was interest on delayed payments.
“No satisfactory reason was provided by management for the delayed payment of certificates resulting in these penalties. Had the council paid for the certificates on time, the interest charged on the delay would have been avoided and in the circumstance, the council engaged in payment of avoidable costs of Sh57 million and value for money may not have been derived.”
Mr Ouko also said the current liabilities of the council stands at Sh3.4 billion and exceeds its current assets which amount to Sh3.2 billion resulting in negative working capital of Sh157 million.
“In the circumstance, the council is technically insolvent and cannot meet its short term obligations as and when they fall due.”
The council also planned to raise Sh6.9 billion in revenue but only managed Sh6.4 billion resulting in a Sh526 million deficit.