Agency wasted Sh6.4b roads cash, says audit

The Kenya National Highways Authority (KeNHA) is on the spot for spending more than Sh6.4 billion on six projects whose contract sums were varied or delayed, attracting hefty interests.

In his latest report released last week, Auditor General Edward Ouko demonstrated how KeNHA failed to observe procurement laws, leading to massive payments.

Some of the projects include rehabilitation of the Kisumu-Kakamega road, which gobbled up the highest amount. This was after the project was varied by 79 per cent to Sh8 billion from the original contract sum of Sh4.5 billion.

The two-year contract was awarded to M/S China Overseas Engineering Group at Sh4,452,053,438.28. The project was to begin on January 5, 2013, to end in October 2015. This was extended to October 10, 2016.

By June 2016, only 54 per cent of the work had been done with 93 per cent of the time having lapsed.

“In addition, the contract sum was revised by an additional Sh3,509,473,923 to Sh7,961,527,361.84, a variation of 78.8 per cent, contrary to the Public Disposal Act,” said the report tabled by National Assembly Leader of Majority Aden Duale last Thursday.

The Public Disposal Act says the cumulative value of contract variations should not result in increment of the total contract price by more than 25 per cent of its original price.

The 2015-2016 report shows that in some instances, the public lost huge sums of money after the roads agency exceeded its own engineers' estimates to award tenders at astronomical figures.

Mr Ouko cited KeNHA's decision to privatise overloading control centres (weighbridges) on major trunk roads as one of those incidents.

The weighbridges were divided into five clusters, with KeNHA inviting expressions of interest in 2012. The tenders were evaluated and eventually signed on February 4, 2013.

“Examination of records and documents relating to these consultancy contracts revealed the tender sums may not have been competitive and consequently exceeded the engineers' estimate by a total of Sh1,177,105,157.53,” read Ouko's report dated July 31, 2017.

In the first cluster of Webuye, Malaba, Eldoret and adjacent roads, engineers estimated about Sh264 million but a contract sum was put at Sh519 million.

Cluster Two comprising the Gilgil and Mai Mahiu roads were costed at Sh287.5 million but awarded at a sum of Sh508.7 million, leading to a loss of Sh222 million.

Cluster Three, which had Mariakani, Mtwapa and adjacent roads, was estimated at Sh362 million but awarded at Sh533 million.

Cluster Four - Athi River, Thika, Isinya and adjacent roads - was estimated at Sh340 million but KeNHA awarded the contract at Sh631 million.

Cluster Five, with Busia, Isebania, Kisumu and adjacent roads, was put at Sh233 million but given at Sh452 million.

The auditor revealed KeNHA paid an extra Sh246 million in excess of the contract sums to five firms.

Ouko has also raised the red flag on the contract for periodic maintenance of the Mombasa-Miritini road, which was originally awarded to M/S Talewa Road Construction Ltd at Sh341,180,245. The contract was terminated after poor performance and KeNHA paid Sh144,146,778,76 for 42 per cent of work done.

Ouko has also raised questions on how Sh11,595,415.20 was paid to M/S Sinai Construction in 2012 to clear the bush in preparation for the opening of the Arusha-Namanga-Athi River road.