Roads agency on the spot over half-done multibillion-shilling projects

Auditor-General Nancy Gathungu has put the Kenya Rural Roads Authority (KeRRA) on the spot over delayed completion of multibillion-shilling road projects that may cost the government dearly.

This comes even as MPs launch investigations into the projects that cost the taxpayer at least Sh14.24 billion yet their completion dates are not yet known more than 10 years since they were awarded. 

The audit reveals that some projects were awarded in 2010 and were to be done in three years but they are yet to be completed despite the budgetary amounts being availed by the government.

Ms Gathungu in her audit report on the accounts of KeRRA for the financial year 2018/9, currently before Parliament, has also raised a red flag over irregular dealings at the roads agency.

At the time the audit issues were detected, Mr Luka Kimeli, who wants to be Marakwet West MP in the 2022 election, was the acting director-general at KeRRA.

Mr William Kisang is the current MP for Marakwet West.

Already, the Public Investments Committee (PIC) of the National Assembly has summoned the current KeRRA management led by acting director-general Philemon Kandie over the audit issues.

“We cannot have a situation where government agencies are allocated taxpayers’ money just to dish to contractors yet they cannot account for the projects being funded,” Mvita MP Abdulswamad Shariff, who chairs PIC, said.

Completion delays

The audit notes that despite the lapse of their completion period, some have completion levels of about 70 per cent raising supervisory issues on the part of KeRRA management over the projects.

The completion delays have seen some projects’ costs escalate by about 80 per cent.

For instance, the construction of Sh2.62 billion Kaptama-Kapsokwony-Sirisia Road was yet to be completed as at June 30, 2019, almost 10 years since the expiry of the completion period.

The 67.79 kilometres road traverses Kimilili, Bungoma West and Mount Elgon sub-counties of Bungoma County.

By July 31, 2015, the project’s average completion level was at 94 per cent despite the contract period having expired on May 13, 2010, about 61 months after the project’s contracted completion date.

The report shows that in 2015, the project contractor was put under receivership.

The contractor’s yard, including the site offices at Kamukuywa, were placed under receivership with all site operations halted.

The audit shows that although the receiver manager had written to KeRRA in July 2015 requesting for mutual winding up of the contract on account of insufficient fund balance for the remaining works, this was yet to be honoured by KeRRA.

Project completion rate

This is despite the Office of the Attorney-General having advised KeRRA to terminate the contract on September 1, 2016.

“As at June 30, 2019, there was no evidence of any action having been undertaken by KeRRA to resolve the matter,” the audit report states. 

The Sh2.4 billion construction to bitumen standards of Naromoru-Munyu-Karisheni Road has also been flagged by the Auditor-General. Works on the 47 kilometres project started on October 1, 2012 with the completion date set for September 30, 2014.

The audit report, however, shows that after obtaining approval from KeRRA in March 2015, the contractor assigned another contractor works valued at Sh2.06 billion.

After the re-assignment, the main contractor’s scope was reduced to 6 kilometres, about 13.3 per cent of the project’s scope.

However, as at June 30, 2017, the overall project completion rate was 72 per cent, which is 57 months after the expected completion time.

The audit report reveals that the assigned contractor’s works were at 71.23 per cent completion rate in spite of the contract period having lapsed two months earlier.

“No adequate explanation was provided for the slow implementation of the project,” the audit reads. 

Interest on delayed payments

The completion of Sh2.12 billion Murang’a-Gitugi and Njumbi-Mioro Road is also lagging behind.

The project was expected to be completed on February 2, 2015 after it was awarded on July 31, 2012.

However, as at June 30, 2018, the overall project delivery was at 73 per cent, more than nine years since the project was awarded with more than 40 months of contract period having elapsed.

As at June 30, 2019, the project was at 88 per cent completion level. This means that the progress on its completion was slow.

The audit shows that KeRRA incurred Sh7 million in interest charged on delayed payments.

The rehabilitation and repair of Sh1.44 billion Eldoret-Ziwa-Kachibora-Kabenes Road has also been flagged.

The project started on September 1, 2011 with completion date set for March 1, 2014.

The completion date would later be revised to March 1, 2016.

Repackaged contract

However, the contract was subsequently repackaged with a new contract sum of Sh2.58 billion.

The repackaged contract had the 24 kilometre Eldoret-Kabenes section costing Sh974.30 million, 31 kilometre Kabenes-Kachibora stretch Sh1.06 billion with the 2o kilometres Moi’s Bridge-Kachibora costing Sh536.05 million.

Although the revised contract period lapsed on March 1, 2016, as at June 30, 2017, the overall progress was at 96 per cent with only 82 per cent of the works having been certified.

“The management did not provide a satisfactory explanation for the escalation of project costs by 79.5 per cent of their original cost,” the audit says.

By June 30, 2019, the Sh1.81 billion Sigalagala-Musoli-Sabatia-Butere road had not been completed, more than six years after the scheduled completion date.

Works on the 34.25 kilometres project started on March 30, 2011 with completion set for June 6, 2013. However, 18 months after the expiry of the original contract date, the main contractor entered into a works reassignment agreement in December 2014.

Out of the 34.25 kilometers of contracted distance, 25 kilometres, about 73 per cent was reassigned to a new contractor at Sh1.11 billion.

The assignee was to complete the works in 18 months.

However, as at June 30, 2018, the project progress report indicated 74.3 percent combined level of project completion.