MPs expose Sh4.5 billion payment gaps in JKIA terminal deal

The Kenya Airports Authority (KAA) was questioned by Parliament’s Public Investments Committee on Commercial Affairs and Energy on Thursday. MPs probed troubling financial dealings tied to the Greenfield Terminal project at Jomo Kenyatta International Airport (JKIA).

The committee, chaired by Pokot South MP David Pkosing, examined KAA’s audited accounts for the financial years 2018/2019 to 2021/2022 and revealed serious irregularities.

A key issue was a Sh75 million payment made in 2014 for the project’s groundbreaking ceremony. This amount was categorised as a “contract variation” paid to contractors despite the absence of any such clause in the original contract or bill of quantities.

Acting KAA Managing Director Nicholas Bodo stated that the groundbreaking event, officiated by the Head of State as part of Vision 2030 flagship initiatives, involved logistical preparations that were not budgeted initially.

The funds were reportedly drawn from contingency allocations within the contract and approved by the tender committee, complying with the Public Procurement and Disposal Act of 2005.

However, MPs disputed the classification of ceremonial expenses as contract variations, cautioning that this could amount to misuse of taxpayers’ money.

Further concerns arose over payments totalling more than Sh4.5 billion disbursed to contractors and consultants without proof of work completed by June 30, 2019.

This included Sh4.31 billion advanced to the main contractor ACEG/CATIC JV and Sh216 million to the Louis Berger JV Runji and Partners consulting firm.

KAA clarified that the advance was secured by an Advance Payment Guarantee and that the funds were recovered or settled through mediation after contract termination.

Additionally, KAA paid Sh7.4 million to PricewaterhouseCoopers after terminating its contract under unclear circumstances.

The committee criticised the contract termination process, pointing out insufficient documentation proving agreement from contractors and consultants, which could lead to legal risks for the government.

KAA provided supporting documents showing that the consultants had acknowledged contract termination and that contractor disputes were resolved through mediation.

The Greenfield Terminal project, which aimed to increase JKIA’s passenger capacity, was controversially stopped in 2016.

The committee pledged to prepare a report recommending whether further investigations or legal proceedings are necessary to protect public funds and improve procurement oversight.

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