Costly gadgets rot in Kenya Pipeline Company stores as frivolous rows, probes dominate

Some of the Kenya Pipeline Company underground 20-inch multi-product oil pipeline at Kokotoni village along the Mombasa-Nairobi highway awaiting to be installed. A parliamentary committee has launched an inquiry into why Sh1 billion worth of goods procured by a parastatal two years ago are wasting away in warehouses because of queries regarding the tenders awarded. (PHOTO: GIDEON MAUNDU/ STANDARD)

A parliamentary committee has launched an inquiry into why Sh1 billion worth of goods procured by a parastatal two years ago are wasting away in warehouses because of queries regarding the tenders awarded.

The inquiry by the National Assembly’s Public Investments Committee (PIC) centres on two tenders — one worth Sh600 million and the other Sh320 million — in which funds were spent by Kenya Pipeline Company on gadgets and equipment which have never been put to use several years later.

The first tender involved the supply of hydrant pit valves — the equipment used in refuelling aircraft — at Jomo Kenyatta International Airport (JKIA).

In 2014, KPC tendered for the replacement of 60 HPVs to replace faulty and outdated ones at a cost of Sh600 million. All the 60 valves were delivered. But before they could be put to use, the Ethics and Anti-Corruption Commission (EACC) moved in to investigate the tendering process.

The EACC investigations put a freeze on their use and stopped further payments to Aero Dispenser Valves Ltd, the company that delivered them. The company had already been paid Sh200 million, a third of the contract sum.

“You are requested to submit a comprehensive submission on the justification for the purchase of HPV, isolation valves and two-year operational spares and evidence of inclusion in the KPC annual procurement plan,” a letter signed by Michael Sialai for the Clerk of National Assembly says.

PIC also wants to be furnished with a detailed chronology of the procurement process. It wants details about the tender advertisement, how it was awarded,  the contract sum for the tender and profile of Aero Dispenser Valves Ltd.

JKIA has been running below capacity owing to unserviceable hydrant pits. In August, Kenya Airways said unserviceable pits had contributed to its declining performance.

 “Unavailability of this bay has major negative cost implications to the airline and passenger experience. A speedy solution to get this bay in operation should be treated with absolute importance and given the level of urgency it deserves,” Mr Francis Musila, KQ’s director of ground services, said in a letter to KPC depot manager Xavier Baraza.

Delayed use

Recently, EACC ruled that there was no impropriety but left KPC to determine whether it got value for its money.

In the second tender, KPC acquired Sh320 million worth of composite sleeves to insulate vulnerable parts of the main pipeline between Mombasa and Nairobi. The sleeves were delivered by Thermo Dynamics Ltd on time but KPC’s former top management delayed in putting them to use because of infighting.

By the time it decided to put them to use, one of their accompaniments, the adhesives to fix them, were just about to expire. In about three months they would expire. By that time also, the main pipeline which was to be insulated, burst and leaked fuel into the Thange area of Kibwezi East, leading to expensive compensation claims by local residents.

The sleeves are still in KPC stores alongside their expired adhesives, even as the PIC inquiry continues.

“Kindly prepare and submit five copies of the requested information, including relevant supporting documents to reach the Office of the Clerk,” the letter dated November 23, 2016 reads.

Besides the two tenders, PIC has also demanded an update on the progress made by Zakhem International Construction Ltd in overhauling the 43-year-old pipeline at a cost of Sh48 billion.

PIC wants a report on works done so far and  details of payments made to Zakhem as at November 20, 2016. It has also asked for details of money Zakhem owes sub-contractors.

Joe Sang, the KPC Managing Director, told The Standard on Sunday that 68 per cent of the work had been done and that the pipeline would be completed in April next year.