Airport buses saga firm wants Sh40m for breach of contract

Kenya Airways boss Mbuvi Ngunze (centre) and a KQ staff member show President Uhuru Kenyatta how to carry out the self-service check-in during the commissioning of Terminal 2 at the JKIA on May 15, 2015. PHOTO | SALATON NJAU |  NATION MEDIA GROUP

In Summary

• President had rebuked authority for paying Sh10m a month for five vehicles.
• Relief and Mission Logistics threatens to take authority to court for termination of its contract.

By JOHN NGIRACHU
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President Uhuru Kenyatta recently criticised Kenya Airports Authority of entering into a bus transport deal he felt was too expensive.

The criticism led to cancellation of a contract for the transportation of passengers at the Jomo Kenyatta Airport, Nairobi, which could now cost taxpayers millions as the company has threatened to sue for the termination of the contract.

Relief and Mission Logistics is demanding $431,200 (Sh40.9 million) from the airports authority.

The President has directed the authority to take action against the officials who granted the tender on April 7, 2014.

The company has also demanded the reinstatement of its services or they will go to court.

After President Kenyatta’s verbal instruction on May 15, the authority stopped the firm and followed it up with an email on June 5.

In a letter by Senior Counsel Evans Monari, of Coulson Harney Advocates, the firm gives the authority seven days from June 23, to reinstate it’s services.

Matters could become complicated because the airports authority had not started charging airlines $60 (Sh5,700) per bus ride it should have been paid.

When they met the parliamentary transport committee, suspended chief executive Lucy Mbugua and head of Finance John Thumbi said the acting chief executive, Mr Yatich Kangogo, had waived payments for two months.

The authority could be staring at a protracted court case or a huge payout to the company.

Relief and Mission Logistics said they placed orders for the five buses, each costing Sh45 million, from the manufacturer, Cobus, in Germany based on the agreement.

President Kenyatta also appears to have over-estimated the capacity of the National Youth Service buses he suggested, which he said would each cost Sh100,000 a month.

AVIATION INSURANCE

Acting airport manager Charles Owino says in an internal memo that the youth service had offered to provide four 59-seater buses and two 21-seater buses at a total cost of Sh4.1 million a month.

Drivers and attendants would be paid separately and receive training since the airside is a high security area in terms of passengers safety, aircraft and other equipment.

In contrast, each of the Cobus vehicles has a capacity of 112 passengers and are approved by the International Air Travel Association and have aviation insurance, which the youth service ones lack.

When he was told about the buses, President Kenyatta said: “I find it impossible to believe and to understand that you can say you have five buses here for which you are paying Sh10 million a month. Jameni si ukuje nikupatie basi ya NYS at a hundred thousand. (Why don’t you ask me for buses from the NYS at Sh100,000.)”

The authority had asked Kenya Airways to offer the services as it tenders for seven buses through World Bank funding.

The board of directors appears to be the source, according to Mr Thumbi and Ms Mbugua who told parliament’s transport committee a week ago that the deal had been sanctioned by the board.

Last Thursday, the board members were recalled from a scheduled meeting with the committee.

But committee vice-chairman Mohamud Maalim (Mandera West, URP), clashed with Mr Ibrahim Abass (Ijara) after he called off the meeting abruptly despite communication that the board members were in the building.

Mr Abass said he had clashed with Mr Maalim because of the manner in which the board members had left Continental House.

“I understand that they came but were called by someone and told to go back. We want to know who that person is,” said Mr Abass.

He said the committee was also concerned that the board suspended the officers yet it had approved the deal.

Last week, Ms Mbugua presented the committee with a summary of the deal with the approval of the board in February 2011.

The tender was eventually awarded in May 2012 with Relief Mission and Logistics.