Auditor General flags 'irregular' spending on stadiums construction

Auditor General Nancy Gathungu has raised a red flag over the expenditure of billions of public funds to construct four stadiums in the country.

The four are Jamhuri Posta Ground (Nairobi), Jomo Kenyatta Showground Stadium (Kisumu), Wang’uru Stadium (Kirinyaga) and Kirigiti Stadium (Kiambu).

Impossible to uncertain

In her report on National Government Ministries, Departments, and Agencies for the financial year ending June 30, 2023, Gathungu says it is impossible to ascertain value for money spent on the projects and that procurement laws were flouted when awarding some tenders to contracts for the works. 

She adds that in some cases, some tenders were hiked.

Three contractors were tasked with upgrading Jamhuri Posta Grounds, a project that gobbled Sh1,190,971,897.

Without justification

Out of that amount, Ms Gathungu states that two contracts worth a sum of Sh581,361,187 for “additional works” at the facility were “awarded through direct procurement method without justification".

The contracts were to the tune of Sh175 million and Sh406,361,187, respectively, which the Auditor General further notes “exceeded the engineers’ valuations” by Sh25 million and Sh32,087,272, respectively.

“The use of direct procurement method did not meet the provisions of Section 103(2) of the Public Procurement and Asset Disposal Act, 2015,” she says, adding that surpassing the engineers’ valuations was contrary to Regulation 90(1) (cii) of the Public Procurement and Asset Disposal Regulations, 2020.
She explains that the law demands an accounting officer to satisfy that the offer is at the prevailing market price before the use of the direct procurement method.

Ms Gathungu adds that a physical assessment of the facility on September 11 last year revealed that electricity had not been connected to the floodlights and the contractor was yet to hand over the project to the government for public use.

“In the circumstances, the regularity and value for money to be realised from the expenditure of Sh1,190,971,897 incurred on the project could not be confirmed and management was in breach of the law,” says the Auditor General.

Former President Uhuru Kenyatta, on March 25, 2022, opened for public use Phase One of the facility, reported to have cost Sh609 million.

Three football pitches, a rugby pitch, a running track, ablutions, food courts and changing rooms are among the facilities that were put up on the ground.

Talanta Sports City Stadium

Last Friday, President William Ruto presided over the ground-breaking ceremony for the 60,000-seater capacity Talanta Sports City Stadium.

The stadium is among the venues earmarked for the 2027 Africa Cup of Nations that will be co-hosted by Kenya, Uganda and Tanzania.

Speaking during the ground-breaking ceremony, Sports Cabinet Secretary Ababu Namwamba said some facilities constructed at the venue would not be destroyed as the contractor had agreed to move some of them within the venue. 

Hike in contract price

For the construction of Kirigiti Stadium, Ms Gathungu says there was a 25 percent hike in contract price “which was not supported with approval documents.”

The government awarded two contracts for the project, totalling Sh1,091,031,466.

The report states the price of the first contract was unprocedurally hiked by Sh148,750,152 from the initial Sh596,514,670 to Sh745,264,822. 

The second contract worth Sh345,766,644, for “additional work” at the facility, was awarded by direct procurement to the same contractor without justification.

She notes that as of September 11, 2023, the first phase of the project was complete, but the second phase had stalled "due to non-payment of the contractor" and that no explanation was given for the failure to pay all certified certificates.

“In the circumstances, the regularity and value for money realised from the expenditure of Sh1,091,031,466 incurred on the Project could not be confirmed and management was in breach of the law,” she summarises.

Unproceedural increase

It was the same case at Wang’uru Stadium in Mwea, as the contract was unprocedurally increased by 25 percent to Sh696,473,751.

While the initial tender was Sh310,500,000, it was hiked to Sh387,053,751 without approval documents. 

The second contract for additional work at the stadium was awarded to the same contractor at Sh309,420,000 “through direct procurement method without justification.”

“In the circumstances, the regularity and value for money to be realized from the expenditure of Sh 696,473,751 incurred on the project could not be confirmed and management was in breach of the law,” states Ms Gathungu. 

For Jomo Kenyatta Show Ground Stadium, the Auditor General said: “The value for money obtained from the expenditure of Sh350,000,000 could not confirmed.”
There are instances of vandalism in the facility as “some metal covers for stormwater drainage were missing.” 

Despite being completed in 2020, the contractor was yet to hand over the facility to the national government, but the Kisumu County Government had already taken possession of the facility.

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