Fraud alert: State auditor queries doubling of road costs

Major contractors reported to have been paid more

The taxpayer could lose more than Sh10 billion in tenders thought to be fraudulent, the Auditor General's findings reveal.

Maintenance costs for Thika Road is among the tenders captured in the audit report.

Also recorded are costs for rehabilitating the road linking Kisumu and Kakamega. The contractor was paid Sh7.6 billion, which is nearly double the agreed price.

Fresh investigations on the Kenya National Highways Authority (KeNHA) unveiled widespread losses, where budgets were blown and expenditure incurred with little regard for planning.

Major contractors are said to have been paid more than the works completed in projects that were running behind schedule.

In several instances, the authority spent double the budgeted amounts on road projects that are not even nearing completion.

Auditor General Edward Ouko said he could not ascertain whether there was value for money on the identified roads where the engineers’ input was ignored.

“I believe the audit evidence I have obtained is sufficient and appropriate to provide a basis for my qualified opinion,” he said in his audit report for the period ending June 2017.

Maintenance and rehabilitation of the identified roads was intended to cost Sh1.5 billion but KeNHA paid out close to Sh2.7 billion.

The contract price for maintaining Thika Road is given as Sh137 million but KeNHA, according to Mr Ouko, paid Sh293 million for the year – more than double the budget.

A similar trend was observed on the highway linking Kisumu and Busia, where the contractor was signed up for Sh76 million but was paid Sh183 million in the end.

No explanations were given for the disregard to contracts.

Lagged behind

Ouko cited that major projects had lagged behind the proposed schedule even though KeNHA had already paid for most of the works.

Contractors are allowed a maximum price variation of 30 per cent to take care of unforeseen events such as heavy rains, which could disrupt construction schedules.

Yesterday, KeNHA Corporate Communications Manager Charles Njogu said the questions raised had been responded to adequately.

"We do not have any issues with the Auditor General at the moment because all matters raised were addressed," he said.