Kenya Urban Roads Authority owes contractors and suppliers Sh14.1 billion, according to a report by Auditor General Nancy Gathungu.
The report said the pending bills have exposed the authority to unnecessary and avoidable costs of claims of interest and penalties on late payments to contractors on various projects.
“The increase in pending bills may affect the cash flow of the authority and adversely affect its operations,” Gathungu said in her report for the period ended June 30, 2022.
She added that a review of records revealed that there were claims of interest on late payment to contractors in respect of seven projects undertaken by the authority totalling Sh110.4 million.
“Interest on delayed payments represents unnecessary additional charge to public funds beyond the projects’ cost,” Gathungu added.
Gathungu further highlighted the delayed construction of Ngong Road footbridges in Nairobi.
She noted the contract for the construction of the footbridges was awarded at Sh190.5 million.
The project consists of the construction of three footbridges located at (i) Gate B of Kenyatta National Hospital, Coptic Hospital and Kenya Science Campus.
Gathungu said the contract was signed on September 24, 2020, while possession of the site was granted on October 7, 2020, with the estimated completion date being May 2, 2022.
“As at the time of the audit inspection in February 2023, the physical progress report was indicated at 31 per cent. The total amount certified and paid was Sh40,379,780 with programmed certification of Sh21,576,502.53 pending payment which totalled to Sh61,956,283 or 32.5 per cent of the contract sum,” she said.
She noted that the contractor had requested for extension of time and completion date which was revised to May 2023.
The Auditor General said the Nairobi Hospital management raised concern that the designated location of the footbridge at Gate B of KNH did not have the approved consent from the Hospital through an Environmental Impact Assessment (EIA) involvement as required.
She noted that the matter was referred to the National Environment Complaints Committee.
