Parliament office block delays as contractors tussle

A row between a Chinese firm contracted to build Parliament’s multi-storey office block and a local contractor has delayed the Sh5.8 billion project.

Jiang Xi is opposed to the subcontracting of interior fitting works to Nightingale by the Parliamentary Service Commission. 

Jiang Xi, the main contractor, wants to handle the interior fitting works as well. Nightingale is among 14 subcontractors hired to work with them.

The project was supposed to be concluded in January last year. The delay means taxpayers may have to foot extra costs.

The office block comprises four basement parking floors, one reception floor, four committee room floors, one open garden floor, 18 floors for members' offices, a health club, restaurant, and service floor.

The subcontractors, who were to execute the specialised works, were hired by the PSC and later passed to the main contractor, who is their supervisor.

The row started after Jiang Xi raised concerns about the tender awarded to Nightingale. It lodged a complaint with the Public Procurement Administrative Review Board but lost.

The application by Jiang Xi was dismissed in December last year. The project manager, Ministry of Public Works, asked that it proceeds to subcontract Nightingale but the Chinese firm refused.

Jiang Xi, which also bid for the tender, complained that it was not involved in the tendering for the subcontractor, among other issues, bordering on the latter's contractual terms.

“They argued that we [PSC] were not supposed to procure subcontractors despite the fact that we had done the others,” Clement Nyandiere, a member of the Project Management Committee, said.

He spoke before the Public Accounts Committee, which was reviewing the PSC's audited accounts for 2016-17.

Also probed by the committee was a concern that taxpayers may have footed an extra Sh370 million in wrongful payment to the Chinese contractor.

The claim arose from fears that the PSC deviated from the contract’s specification that the money be paid out in a ratio of 80:20 in respect of the Kenyan shilling to the US dollar.

Auditor General Edward Ouko queried the decision by PSC to process the payments in total disregard of the 80:20 provision.

The Ministry of Public Works had raised the payment certificates in Kenya shillings and not USD as per the contract terms.

MPs raised concerns that the Chinese firm seemed to be operating as one that cannot be compelled to follow the law.

Senate Clerk Jeremiah Nyegenye yesterday told the PAC that the issue between the two firms is a question of conflict of interest on the part of the main contractor.

But chairman Opiyo Wandayi (Ugunja) warned that the delayed work is likely to occasion penalties, even as the contractor is seeking extra pay following the extension of the contract period.

He was joined by his Keiyo South counterpart Daniel Rono who lamented that the building had become an “eyesore and a shame to the whole Parliament.”

On the alleged extra payment, Nyegenye said: “The Sh370 million that was paid to the main contractor was the money that was to be served if we observed the 80:20 ratio. No money was lost as the contractor was paid what was due to them.”

“The dispute was at what point it should be computed; the public works ministry had reasoned that they raise the certificates in Kenyan shillings and pass the same to us for conversion to dollars,” he said.

“We were not at 80:20 because of the dispute of at what point to compute and because of an attempt by us not to do it that way.”

At the moment, a standoff between Parliament and the main contractor over the nominated contractor is yet to be resolved.

The situation has grown to a point where Jiang XI has threatened to terminate, a move that would be costly to the taxpayer as it would mean retendering for the project.

Rarieda MP Otiende Amollo asked, “How was the contract awarded? Why was it awarded and who raised the invoices? Why does the secretary contend that no money was lost?”

Amollo said the concession by the secretary (Nyegenye) that no money was lost would only come payment was done in Kenyan shillings. 

“The project has either stalled or is stalling because the contractor does not want to subcontract,” Amolo said.

(edited by O. Owino)