KeNHA on spot for paying excess Sh1 billion to contractors

The Kenya National Highways Authority overpaid consultants by Sh1.17 billion, a new audit has shown.

The Auditor General's report shows tenders awarded to consultancy firms may not have been competitive and exceed the amount engineers had budgeted for.

For instance, the engineer had estimated the Webuye, Malaba and Eldoret cluster to cost Sh263.9 million. However, the contractor’s tender sum was put at Sh519.3 million, causing a variance of Sh255.3 million.

The Gilgil-Mai Mahiu road would have cost Sh287.5 million, according to the engineer, but the contractor was awarded the tender at Sh508.7 million.

The Athi River, Thika and Isinya roads were estimated to cost Sh340 million, but the tender was awarded to the tune of Sh650 million.

The audit further reveals that Busia, Isebania and Kisumu road network was estimated to cost Sh233 million but ended up sucking at Sh452 million.

The cost of Mariakani and Mtwapa road network initially was Sh361 million but KeNHA contracted the same at Sh532 million.

Cumulatively, the five major contracts were estimated by engineers to have cost Sh1.4 billion but were awarded at Sh2.6 billion, occasioning a variance of Sh1.1 billion.

The Auditor General says still, the authority did not get value for money.

In the year under review, KeNHA paid Sh58 million for engineer’s superintendence which was Sh28 million much more than the budget for Webuye, Malaba and Eldoret cluster roads.

In the Athi River, Thika Road and Isinya clusters gobbled up Sh293 million even after they had been contracted at Sh137 million. Similarly, KeNHA paid the engineer's fee in excess of Sh44 million.

For Busia, Isebania and Kisumu road, the auditor revealed that KeNHA paid Sh183 million for management and operations expenditure although the contract sum was Sh76 million. The engineer’s initial superintendence fee was Sh18 million but later paid in excess of Sh32 million.

The auditor showed that for Gilgil and Mai Mahiu road works, KeNHA paid Sh62 million up from Sh25 million that was contracted.

For Mariakani and Mtwapa road works, the contract amount was estimated at Sh41 million but the agency ended up paying Sh71 million.

“It was observed that the three-year contract period ended on December 31, 2015, and as at the end of the contract period, the consultant had been paid in excess of the contract amounts. In the foregoing, it was not possible to confirm whether the authority obtained value for money in incurring the above expenditure,” reads the report.

In the rehabilitation of the Kisumu-Kakamega road, contract was awarded to China Overseas Engineering Group Co Limited at Sh4.4 billion for a period of two years. However, during review, the project was behind schedule.

“In addition, the contract was revised by an additional Sh3.5 billion to Sh7.9 billion contrary to the Public Procurement and Asset Disposal Act of 2005,” the reports reads in part.