The construction of Ronald Ngala Utalii College in Kilifi has used up an additional Sh2.3 billion from the revised budget, the parliamentary Committee on Implementation was told.
The committee, led by Narok North MP Richard Moitalel, was told that Sh7.3 billion had already been disbursed to the contractors and the consortiums.
The initial budget was Sh8.5 billion but due to austerity measures, the government revised the project cost to Sh4.93 billion.
A primary school, a fire station, sickbay and clinic were removed from the initial concept paper and design works.
Despite having surpassed its budget, phase one of the college is still at 60.01 per cent.
Moitalel said the committee visited the college to ascertain if there was a prudent use of government funds. This followed a petition by the Kilifi North MP Owen Baya.
The committee is also interrogating why the college has not been completed.
Construction works started in 2013 and the expected completion date was June 2019. According to the fund’s board, the project is currently at 60.01 per cent done.
“Part of the reason we are here is to meet the contractor,” Moitalel said.
The contractor, Mulji Devraj and brothers LTD, was represented by Mahendra Halai.
Halai said he failed to appear before the committee in Nairobi because he was sick and was advised not to travel by his doctor.
On the project, Halai said it has been delayed because of late payments.
“We were awarded this project in 2013 and we received the first payment in 2014. Payment has been a big issue,” he said.
The project is being undertaken by the Tourism Fund.
Tourism Fund Board chairman Alphonse Kioko said the Covid-19 pandemic has greatly undermined the implementation.
Kioko said 8,362 establishments where the fund collects taxes from, have been closed which accounts for 80 per cent of revenue.
“The Tourism Fund could no longer sustain the project because of the reduced collections as a result of the effects of the Covid-19 pandemic,” Kioko said.
He said currently, only 3,234 establishments are operating.
“These establishments are operating at bare minimum leading to an acute reduction in levy collection,” Kioko said.
The outstanding balance of claims verified, which includes certificates done by the Tourism Fund, is Sh560 million.
The board had a hard time explaining to the committee the variations of the pricing.
“The initial tender was Sh1.9 billion, then we were told it was Sh8.5 billion, now we are being told that it has been revised down to Sh4.9 billion,” Baya said.
He said the project had lost over Sh2.9 billion in interests and penalties.
According to a report by the Trust Fund, the contractor was paid Sh4.01 billion, the managing consortium was paid Sh3.2 billion and lawyers and Nema were paid Sh117 million.
To complete phase one of the project in 12 months, the board has come up with an accelerated programme, which is divided into two phases under phase one.
Phase 1(1) runs from May 2021 to June 2022 and requires Sh1.6 billion while Phase two of one requires Sh1.1 billion. Phase 2(1) is the hotel component estimated at Sh5.8 billion.
Phase two has yet to start.
Kioko said the Tourism Fund is looking for a solid Public-Private Partnership before commissioning to avoid interests and penalties.
“The fund is keen on avoiding a recurrence of accrued interests and penalties due to non-payment,” Kioko added.
Moitalel said they have initiated an investigation and assured that if there is any sort of money laundering, action will be taken.
“This is a national project which should not be let to fail. We as Parliament will follow up the matter and see to it that those who have been overpaid return the money.
"If Sh7.9 billion has been used and the project is at 60.01 percent how will Sh1.9 billion complete the remaining 40 per cent?” he asked.
-Edited by SKanyara
