Kenyan road contractor sues Indian firm over Sh165m deal

Corporate News

Bridgeways Contractors have filed an application in the High Court claiming Vil Limited is liquidating its assets in Kenya to evade paying a Sh165 million debt. PHOTO | FILE 

By BRIAN WASUNA, bwasuna@ke.nationmedia.com

A Kenyan road contractor has asked the High Court to place a caveat on Indian firm Vil Limited’s assets over a Sh165 million debt it claims arose from a road construction deal.

Bridgeways Contractors have filed an application in the High Court claiming Vil Limited is liquidating its assets in Kenya to evade paying the sum.

Vil Limited subcontracted Bridgeways to construct a 40 kilometre dual carriage way road connecting Kakamega to Kaburengu in Western Kenya.

The Kenyan firm now claims Vil Limited has advertised for the sale of all its property in Kenya and has planned to leave the country without paying its debts. Vil Limited is yet to respond to the suit.

“Bridgeways performed its obligation as per the contract and Vil Limited has refused to pay the plaintiff Sh165.5 million for the work done. The defendant has also started to advertise its property for sale with the intention of leaving the country and to avoid paying the plaintiff,” Bridgeways says.

The subcontractor has attached advertisements from online portal OLX as part of its evidence against Vil Limited. It wants Vil Limited compelled to deposit Sh165 million in court as security, as it is fearful that the Indian firm may have sold off all its assets by the time the suit is determined.

Bridgeways says it took a loan to fund the project and is now unable to repay it because of frustration from Vil Limited. The project is part of Kenya’s plan to build a 10,000 kilometre road network by 2018.

The roads will be built in three phases with the first stage covering 2,000 kilometres, the second 3,000 and the final Sh5,000 with investors not showing interest in building roads in Northern Kenya due to their shorter stretches and insecurity in the region.

The first 2,000 kilometres have been divided into 45 lots and the Wednesday tenders were for the initial nine bids. Vil Limited subcontracted Bridgeways in August last year to put up the Kakamega-Kaburengu road.

Road construction in Kenya has often lagged due to cash shortfalls, with only 14,100km or 8.7 per cent of the total network tarmacked.About 49 firms, 45 per cent locals, have been shortlisted in the project that will create nearly 137,000 direct jobs.

Bridgeways slapped Vil Limited with an invoice for the work in April, then sent a demand letter this month.

Bridgeways says Vil Limited has admitted to owing the amount in communications between the two firms and that the Indian firm even furnished it with vehicle log books as security. Vil has allegedly advertised for the sale of 81 heavy duty vehicles used in road construction.