The firm contracted to construct the Sh6.2 billion Kakamega County Referral and Teaching Hospital has declined to return to the site over delayed payments.
The contractor, China Railway Jiangsu Engineering (East Africa), suspended work and left the site in February over interim certificates, over-retention, accrued interest, price fluctuations and extended preliminary costs totalling more than half a billion.
County Health Services executive Collins Matemba said on Friday that the contractor failed to return to the site as agreed over two weeks ago.
“We had a meeting with the contractor and governor and agreed that he returns to the site in two weeks time, which ended last week. It's like he has declined to return because this is the third week now,” he said.
“We have made payments totalling over Sh250 million, but we still owe the contractor. They are demanding a lot of money because of penalties that have accrued, earned interest and interest has earned interest, but they are negotiable," Matemba added.
The contractor is demanding Sh576 million which includes Sh204,527,314 from unpaid certificates, Sh58,160,587 in over-retention, Sh30,221,299 in accrued interest, Sh121,448,597 (price fluctuations) and Sh61,885,923 for extended preliminary costs.
The county government has allocated Sh510 million in its proposed 2021-22 budget estimates for completion and equipping of the first phase of the KCTRH.
The first phase of the 750-bed capacity hospital is to cost Sh2.5 billion. The contractor has raised 50 interim payment certificates for work done totalling Sh1.9 billion.
The county may incur additional expenses as the amount continues to accrue interest and idle equipment on site continues to attract charges under the contractual terms.
Reliable sources told the Star that the contractor was reluctant to resume work until the outstanding bills were cleared.
"The contractor fears that if work resumes, further delays may occur and you know the governor's term is ending next year. The contractor prefers that the amount be settled in full before work resumes," one of the engineers said of the project.
The hospital is one of Governor Wycliffe Oparanya's flagship projects.
Once completed, the facility will not only serve residents of Kakamega county but the entire former Western Province since it will be the only level 6 hospital in the region.
Currently, residents of Kakamega, Bungoma, Busia and Vihiga counties seeking specialised medication have to travel to either Moi Teaching and Referral Hospital in Eldoret or Jaramogi Oginga Odinga Teaching and Referral Hospital in Kisumu.
Edited by A.N
