This archive report was first published on 22 August 2019.
On August 22, 2019, the Directorate of Criminal Investigations (DCI) took the decision to suspend payments worth Sh3.3 billion to Zakhem International Construction Company, a Lebanese contractor building the Mombasa-Nairobi pipeline.
The Kenya Pipeline Company (KPC) had awarded Zakhem International the contract to build the 450km pipeline at an initial cost of Sh48.4 billion, with a completion period of 18 months.
However, the contractor sought five extensions of time to complete the project, and later slapped the KPC with a Sh11 billion bill, which was later adjusted to Sh18.9 billion before being scaled down to Sh4.4 billion following the procurement of a third-party expert scheduler.
The amount was further reduced to Sh2.8 billion after deductions of Sh1 billion in claim variations and Sh456 million in Value Added Tax (VAT).
Acting KPC Managing Director Hudson Andambi told Parliament that a further Sh1.5 billion ($15.2 million) claimed by Zakhem International is yet to be evaluated by the DCI.
Mr. Andambi stated that the DCI, led by George Kinoti, had directed the company not to make any payments pending the conclusion of an ongoing investigation into the procurement of the pipeline.
“Extension of time (EOT) claims number 1 to 4 is currently under investigation by DCI for suspected fraud. So far, no payments have been made on the claims. There is EOT 5 amounting to $15,221095.21 yet to be evaluated,” Mr. Andambi said.
