Sh2 billion national data hub stalled for over a decade, report reveals
The contract was initially awarded for Sh782 million, with a completion timeline of 96 weeks.
The National Treasury is under fire for the stalled National Data Recovery Centre project in Naivasha, Nakuru County, which has cost taxpayers Sh2 billion with little to show for it.
More than a decade after its inception, the project remains incomplete, raising serious concerns about financial mismanagement and accountability.
A report by Auditor-General Nancy Gathungu, covering the 2023/2024 financial year, reveals that the project was initiated in 2009 to provide a crucial backup for government data.
The contract was initially awarded for Sh782 million, with a completion timeline of 96 weeks.
However, the scope was later expanded, dividing the project into three phases. The first phase cost Sh899 million, while the second required an additional Sh205 million.
Despite these payments, which brought the project to 68 per cent completion, work stalled due to a dispute over payments in the third phase.
The Treasury failed to settle a Sh193 million claim meant to compensate for idle resources and other expenses incurred due to delays.
This dispute led the contractor to seek arbitration, resulting in an award of Sh4.1 billion for "loss of profits and other associated costs."
"As of June 30, 2024, the outstanding amount had grown to Sh5.5 billion due to accrued interest. Although the arbitration decision was adopted by the High Court and the Attorney-General indicated that the possibilities of success in case of an appeal were slim and advised the Treasury to negotiate with the contractor, no evidence of negotiations having taken place was provided," states the report.
The Treasury defended itself by arguing that the third phase was a separate tender that required a fresh bidding process.
However, the Auditor-General faulted Treasury officials for poor handling of the contract, suggesting that the financial loss could have been avoided.
"The expenditure would have been avoided had management handled the contract in accordance with the applicable laws and regulations," said Gathungu.
Despite the massive investment, the facility remains non-operational, raising concerns about wasteful spending in government projects.
"In the circumstances, the value for money from the payment of Sh1,987,278,191 could not be confirmed. The full payment of the amount will adversely affect the budgetary allocation for the ministry and is not in the public interest," the Auditor-General added.
A recent visit by the National Assembly Committee on Finance revealed that equipment worth over Sh100 million had been stolen or vandalised, further compounding the project's woes.
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