House teams ask Chirchir to stop new pipeline deal

Members of the Energy committee Nicholas Gumbo (left), Richard Tong’i (centre) and Mpuri Aburi address the press at Parliament buildings. Photo/JENNIFER MUIRURI  

By EDWIN MUTAI, emutai@ke.nationmedia.com

In Summary

• Committees raise concerns over tendering a day after contract signed.

Two parliamentary committees have directed the Energy ministry to stop the construction of the Nairobi-Mombasa pipeline until the National Assembly clears the deal that was signed Tuesday between the Kenya Pipeline Company (KPC) and  Lebanese firm, Zakhem.

 

Public Investments Committee (PIC) says KPC managing director Charles Tanui ignored summons from the watchdog that was probing the Sh43 billion deal.

On Wednesday, it ordered Mr Tanui to appear before it Tuesday as the Parliamentary Energy Committee accused KPC of flouting requirements in awarding the tender to Zakhem.

The KPC on Tuesday signed the contract with the Lebanese firm, which was to start construction next month and end by September 2016 for a pipeline designed to meet petroleum products demand for the eastern Africa region up to the year 2044.

“It seems the activities, the way it is being pursued and fast-tracked is suspect,” said Adan Keynan, the PIC chair.

“We advise the government and in particular Energy and Petroleum cabinet secretary Davis Chirchir to suspend the implementation or signing of project until all emerging issues are sorted out by elected representatives of people.”

PIC directed the Auditor-General Edward Ouko to conduct a forensic audit of entire project from tendering to the award of the contract.

READ: KPC signs Sh43b contract with Zakhem for new pipeline

The watchdog directed the Sergeant-At-Arms to issue summons to Mr Tanui, who risk arrests on failure to appear before the committee Tuesday for contempt to Parliament.

The tendering row looks set to delay the construction of the 450km pipeline which will replace the existing one which has outlived its 30-year lifespan and is prone to leaks.

Zakhem, which constructed the Mombasa-Nairobi pipeline that has been in use since 1978, beat 12 other companies for the mega tender—which is the latest government contract to run into tendering headwinds.

The complaint mainly centred on Zakhem’s financial bid, with some of its rivals claiming that the Lebanese firm may have engaged in ‘‘price under-cutting’’ to lock them out of the job.

Zakhem placed a financial bid of Sh43 billion which was Sh7 billion less than the amount KPC had projected to spend on the project.

Evaluation of financial bids has also been questioned with some losing bidders saying it happened in a record 10 hours.

“Whether this contract was signed yesterday or today, we can annul it as a House. As far as we are concerned, this tender has been done in an opaque way,” said Nicholas Gumbo, a member of the Energy committee.