Parliament has summoned a Chinese contractor over the alleged inflation of the cost of renovating the Kenyatta International Convention Centre (KICC) to Sh3.2 billion ahead of the African Climate Conference that President William Ruto hosted in September last year.
The National Assembly’s Committee on Tourism and Wildlife heard that China Wu Yi had failed to clear Sh674.6 million owed to local subcontractors who undertook the works under the supervision of the Kenya Defence Forces (KDF).
The committee was shocked to learn from 14 subcontractors that China Wu Yi had only paid 17 percent or Sh114 million of the Sh3.19 billion that it said was the total contract sum.
The new figures differ sharply with the Sh1.94 billion that the Ministry of Defence and the KDF said was the total contract sum.
Already, Sh1.25 billion has been disbursed to the Ministry of Defence for payment of the Chinese contractor. The KICC management early this month transferred Sh300 million to the Ministry of Defence for onward remittance to the contractor.
This is in addition to Sh950 million that the KDF has already paid to China Wu Yi. Committee chairperson Kareke Mbiuki demanded to know the origin of the Sh3.2 billion and the involvement of the Chinese firm in the payments to subcontractors.
“We are not aware of any of the Sh3.2 billion contract sums. The information we have is that the project sum was Sh1.94 billion which we as Parliament approved,” the MP for Maasa said.
Parliament in session.
Photo credit: File I Nation Media Group
The 14 contractors said former Chief of Defence Forces Francis Ogolla and Ministry of Defence Principal Secretary Patrick Mariru told them they would be paid their dues upon completion of works.
“This gave us the comfort and assurance we needed to deploy all human, material and financial resources at our disposal at a very short notice to ensure delivery of the services,” FloLizz Contractors Limited Directo Mercy Meria told the MPs.
The local firms told the committee that China Wu Yi told them that they received Sh550 million of the alleged Sh3.2 billion contract fee hence the prorated calculation of 17 per cent.
“China Wu Yi pushed us to sign unfavourable contracts under duress in order to receive the 17 percent payment,” the contractors said in a signed statement tabled before the committee.
The contractors appealed to the committee to stop further payment to China Wu Yi until the matter of the contract sum is resolved and a clear way forward is formally communicated.
They also want to be separated from the Chinese firm and instead be paid the full balance of Sh674,643,330 through an appointed local contractor.
“Our prayer is that 15 percent interest be applied to outstanding payments to local contractors given that it has been over nine months since the project was handed over on September 4, 2023,” Mr Mohammed Munyanya, another contractor, said.
The firms said they carried out 80 percent of the renovation work while China Wu Yi did 20 percent, yet it has retained the bulk of the contract sum.
Ms Meria said the services of the subcontractors were required on a fast-track basis, so they started work before signing the contract documents with KDF.
“We stand to lose 60 percent of our payment if the project cost is determined to be 1.98 billion and not Sh3.2 billion because we are on a prorated contract,” said Ms Meria.
