• Claims arose after contract was not completed within stipulated 18 months and contractor sought extensions. Mombasa to Nairobi line.
• MP says if problem resulted from contractor errors, no single claim should be paid.
The Directorate of Criminal Investigations has stopped the Kenya Pipeline Company from paying Sh3.3 billion claimed by the contractor of Line 5.
The claim is under investigation over suspected fraud after the Lebanese contractor raised figures contested by an expert scheduler.
Line 5 is a 20-inch pipeline running from Mombasa to the main terminal in Nairobi. It was put up since Line 1 was ageing.
KPC acting MD Hudson Andambi on Thursday told MPs at the Energy Committee that the DCI stopped the payment for extension of the project.
“So far, no payments have been made on the extension of term claims,” he said during Thursday's session chaired by Endebess MP Robert Pukose.
The chairman said if the problem occurred as a result of errors on the part of the contractor and the consultant – Shengli Engineering and Consulting Company of China – KPC should not pay a single claim to the contractor.
The claims arose after the contract was not completed within the original period of 18 months. After that, the Lebanese firm Zakhem International Construction Co Ltd (ZIC) applied for five extensions.
What we don't want is another scandal at KPC, much as we want to support the reforms that the management is employing.," Pukose said.Energy Committee chairman MP Robert Pukose
The first extension was to run from February 2016 to September 2016. The firm claimed Sh4.4 billion, which the expert reduced to Sh1.3 billion.
Another extension was for October 2016 to April 2017, for which ZIC sought Sh6.5 billion. It was reduced to Sh1.3 billion.
The third extension was for May to July 2017, for which the contractor demanded Sh4.4 billion. The scheduler reduced it to Sh1.2 billion.
The fourth extension was from July to November 2017. The contractor wanted Sh3.4 billion but it was slashed to Sh440 million.
Extension five was for a month for which KPC was expected to pay Sh1.5 billion. the amount is yet to be evaluated by the independent scheduler.
Andambi said the delay in completion was due to delays in procurement of major equipment, finalising construction drawings, slow work by the contractor and disruption by communities demanding compensation.
"What we don't want is another scandal at KPC much as we want to support the reforms that the management is employing," P,ukose said.
Andambi added that the line has since its commissioning in 2018, achieved an installed flow rate of one million litres per hour and delivered 3.96 billion litres by the end of July 2019.
He said KPC has cut its power costs by Sh80 million every month and reduced the demurrage cost of fuel by 50 per cent from Sh2.16 billion to Sh1.1 billion.
Edited by R.Wamochie