MPs question KeRRA over unexplained Sh200 million in road project costs
Further scrutiny revealed Sh66.2 million in pending payments, some of which had been unsettled for over a year, raising concerns about the financial risks to the project, including potential interest charges and penalties.
The Kenya Rural Roads Authority (KeRRA) is under scrutiny for paying contractors Sh200 million beyond the agreed contract amount for a rural roads project.
Documents presented to the Public Accounts Committee (PAC) on Thursday revealed that the project, initially budgeted at Sh1.22 billion, ended up costing Sh1.42 billion, an excess of Sh207.8 million—a violation of the Public Finance Management Act.
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The Ministry of Roads and Transport faced tough questioning from PAC members over unexplained overpayments for consultancy charges and project financing meant for rural road and market infrastructure improvements, particularly in the Western region.
The Auditor General’s report highlighted the discrepancies, stating, “On the statement of receipts and payments and other project information, as of June 2023, the project had received total funding of Sh1.427 billion against an agreed contractual funding of Sh1.220 billion, which was not explained.”
The report also noted violations of procurement regulations by KeRRA, showing both overpayments and underpayments for various projects.
Lawmakers, led by Tindi Mwale, raised concerns over the statement of receipts, which showed an overpayment of Sh225.6 million, while the total balance stood at Sh435 million, without a clear justification for the discrepancy.
However, Principal Secretary Joseph Mbugua defended the payments, denying any over-financing and attributing the discrepancies to adjustments made to reflect the financing agreement.
“The financing agreement was between the development partner and the National Treasury. The difference between Sh1.47 billion and the agreed Sh1.27 billion is the UK component for the project—it is not over-financing,” Mbugua explained.
However, Rarieda MP Otiende Amolo rejected Mbugua’s explanation, stating, “You can’t amend what you don’t need to amend. If you say there was no over-financing, then stop there. But if you say you adjusted, you are admitting there was over-financing.”
Further scrutiny revealed Sh66.2 million in pending payments, some of which had been unsettled for over a year, raising concerns about the financial risks to the project, including potential interest charges and penalties.
MPs warned that these delays could increase costs and further hinder the project’s completion.
The PAC is expected to summon additional officials from the Ministry of Roads and Transport for further clarification on the irregular payments.
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