Water fraud: Tender changes that saved State Sh14m but landed CEO in trouble

The Longisa-Mulot water project. [Courtesy KNA]

Change of pipe materials in the Bomet-Mulot water project saved the government over Sh14 million, an April 2023 report has revealed.

The report, which The Standard obtained, titled Justification Report for Change of Pipe from Steel to Glass Reinforced Pipes indicates there was a delay in supply of (steel) pipes as earlier proposed.

“The total savings to the project for pipes will therefore be Sh14,065,367.40, which will be project savings and can be utilised for additional connections,” read the report in part.

The report prepared by Central Rift Water Works Development reveals that steel pipes and fittings formed about 42 per cent of the total value of the works. In the justification report, it was revealed that the use of steel pipes would have cost Sh574,955,075.40 while using GRP would have cost Sh560,889,708.

Central Rift Valley Water Works Agency board chairman Mathenge Nderitu on Tuesday during a press conference maintained no money has been lost in the implementation of the project.

“The government has not lost any money actually we have saved. The only thing is that the specifications of materials were changed without the consent of the board,” said Nderitu.

The ethics commission South Rift Regional Manager Godfrey Oyugi said the investigations are being undertaken by officers from the headquarters.

He said the investigations are at an advanced stage.

“The matter is handled by headquarters. I confirm that investigations are at an advanced stage,” he said in a text message.

Last week, the Chief of Staff and Head of Public Service Felix Koskei asked the board to suspend Samuel Oruma pending, investigations into alleged procurement irregularities in the implementation of the project.

Irregular award

The CEO is being investigated by Ethics and Anti-Corruption Commission (EACC) over allegations of irregular award of a Sh1.7 billion tender for the construction of a water and sanitation system for Bomet-Longisa-Mulot.
China Railways No. 10 Engineering Group was awarded the contract.

The investigating agency has been investigating claims of irregularity in the award and change of material.

The investigating agency had requested all original documents pertaining to tendering and material variations. The agency has established that all the documentation requested has been submitted, and most of the staff involved in the project have recorded statements.

The change, as per the report, was pursuant to Clause 13.2 of the General Conditions of the Contract (value engineering).

In the clause, the contractor may, at any time, submit to the engineer a written proposal which will, if adopted, accelerate completion, reduce the cost to the employer of executing, maintaining, or operating the works, improve the efficiency or value to the employer of the completed works, or otherwise be of benefit to the employer.

The contractor is reported to have considered options for importing steel pipes as they reported that the production rate of the local steel pipe suppliers would not have met the tight time frame.

GRP as per the report, offers lightweight, resilient, versatile, efficient, and long-lasting solutions to water and waste water industries in the World.

Coupled with environmental benefits, including lower transportation costs, better performance, reduced operating costs, and a long- life cycle, fibreglass brings many advantages.

The report seen by The Standard further reveals a delay in the supply of steel pipes due to high demand as ASP Company, as per the report, is the only compliant steel pipe and fittings manufacturer in Kenya.

ASP a local supplier had earlier quoted Sh1,381,896,236.17 ($9,359,270.14) for steel pipes supply without transport.

“Following the delays in implementation of some of the projects within our cluster (Kipkarren Dam Water Supply Project, Kiptogot-Kolongolo Water Supply and Sanitation Project; Ugunja-Ukwala-Sega Water Supply Project) attributed to delay in the supply of steel pipes it was predicted that there was high chances that delays in this project will be inevitable,” read the report.

“We explored all recent pipe technologies, including options of importing pipes from outside the country.