House orders KPC to suspend payments on Sh11bn claim for Mombasa-Nairobi pipeline

Mr Joe Sang, Kenya Pipeline Company managing director. PHOTO | FILE 

By EDWIN MUTAI

In Summary

• Public Investments Committee (PIC) directs KPC managing director to stop the approval of any variation of the cost of the contract until the firm completes the pipeline in April and justifies the huge escalation in cost.
• Committee issues summons to Zakhem International Construction Limited's managing director to appear before Parliament next Tuesday to justify his claims.
• Also summoned is the consultant overseeing the project and a KPC engineer who is in charge of the building of the pipeline.

Parliament has ordered the Kenya Pipeline Company (KPC) to suspend any payments arising from a Sh11 billion claim that a contractor building the new Mombasa- Nairobi oil pipeline has slapped on the company.

Public Investments Committee (PIC) directed Mr Joe Sang, the KPC managing director, to stop the approval of any variation of the cost of the contract until the firm completes the pipeline in April and justifies the huge escalation in cost.

READ: Counties’ pipeline network study to be completed in Feb

The committee at the same time issued summons to Mr Ibrahim Zakhem, the managing director of Zakhem International Construction Limited to appear before Parliament next Tuesday to justify his claims.

Also summoned is the consultant overseeing the project and a KPC engineer who is in charge of the building of the pipeline.

The summonses were issued following Mr Zakhem’s failure to present himself at the KPC headquarters where the parliamentary investment committee (PIC) began a four-day tour of the oil pipeline that the government is putting up at a cost of Sh43 billion.

PIC chairman Adan Keynan, who was accompanied by 10 members of the committee, took issue with Mr Zakhem’s failure to appear before the parliamentary team.

The committee said the firm’s managing director had evaded Parliament for the last four years following the award of the contract for the 450-kilometre Mombasa-Nairobi pipeline.

“I am now invoking the provisions of Article 125 of the Constitution and direct the Sergeant-At-Arms to ensure that summons are issued to Mr Zakhem to appear before this committee on Tuesday,” he said.

Explain cost variation

He ordered the KPC board members to also appear that day to explain why the project had been varied for over Sh11 billion on claims of lost time.

READ: Subcontractors deny role in Sh10 billion oil pipeline cost jump

“In the meantime, I order that no variation approval should be granted until we get a plausible explanation from the management of Zakhem,” he directed.

Mr Sang informed the MPs that Zakhem had filed a claim of Sh11 billion as variation of time taken to complete the project.

“We have however not paid any coin to them because the claim is undergoing the necessary due process,” he said.

The committee is touring the project, which Mr Sang said is 78 per cent complete.

He said the project contract duration had been extended to April this year because of delays in sourcing of funds.

emutai@ke.nationmedia.com