Kisumu skyline as seen from Lake Victoria.
A Chinese contractor has slapped the national government with a Sh1.4 billion bill following a botched contract that was to cost taxpayers millions of shillings.
The contract to build the Kisumu centre located within Mamboleo Showground worth Sh330 million has stalled.
The National Assembly’s Public Accounts Committee (PAC) heard that the stalled proposed Africities Convention Centre (Africities ) project in Kisumu County was awarded at a contract sum of Sh890,829,345. Kenya hosted the 9th Edition of the Africities Summit, from May 17-21, May 2022.
The Kisumu County Government spent Sh344 million for the construction of the proposed Africities Convention Centre.
The expenditure includes an amount of Sh250 million for the construction of buildings which further includes Sh250 million paid to the contractor being part of payment for the proposed Kisumu AFRECITIES Convention Centre in Kisumu County.
The contract was scheduled to run for 38 weeks commencing on July 16, 2021.
New completion date
An extension period was granted and the contract period was extended to 73 weeks with the new completion date of December 16, 2022.
Auditor General Nancy Gathungu says a physical verification in December 2022 revealed that the project was only 55 percent complete.
An extension period was granted for the third time and the contract period was revised to 141 weeks with the new completion date of April 8, 2024.
She said the management indicated that works stalled since May 2022 and the contractor has to date been paid Sh250,000,000, leaving a balance of Sh640,829,345.
“However, according to a letter from the Principal Secretary, Devolution to Principal Secretary, the National Treasury dated November 18, 2022, the contractor had submitted Interim Payment Certificates amounting to Sh212,535,291 which were outstanding,” Ms Gathungu said.
Incurring additional costs
“Further, the contractor in their letter Ref: CJIC/KEN/SDD/092 dated October 19, 2023, to the Works Secretary, State Department for Public Works tabulated a sum of Sh1,385,980,479 claiming for loss and expenses due to suspension of works for 502 days from May 24, 2022, to October 18, 2023.”
Ms Gathungu said that, in the circumstances, the State Department risks incurring additional costs in the form of claims and interest on delayed payments. Further, the regularity and value for money of the expenditure of Sh250,000,000 incurred on the project could not be confirmed.
“The National Treasury has reviewed your request for additional funding of Sh1.72 billion to cover the pending bills and completion of Kisumu Convention Centre,” the Treasury Principal Secretary Chris Kiptoo said in a letter to the contractor.
“We have noted that the cost of the contract for construction of the centre is Sh890.8 million and the State Department has paid Sh 250 million for completed works.”
Dr Kiptoo said the department intends to settle the pending bills to avoid further accrual of interests and penalties and complete the project to the intended objectives.
He said the county government of Kisumu received conditional grants to implement the project.
