Auditor-General exposes billions lost in mismanaged road projects under state agencies
By Lucy Mumbi |
The 2022/2023 National Government audit report highlights abandoned projects, unpaid bills and uncompensated landowners whose property was taken for road construction.
Auditor-General Nancy Gathungu has revealed massive financial irregularities in Kenya's three major road agencies including Kenya National Highways Authority (KeNHA), Kenya Rural Roads Authority (KeRRA), and Kenya Urban Roads Authority (KURA).
The 2022/2023 National Government audit report highlights abandoned projects, unpaid bills and uncompensated landowners whose property was taken for road construction.
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Gathungu’s report notes widespread financial losses, including billions wasted on stalled projects and unexplained expenditures.
Among the highlighted cases is the installation of streetlights along the Nairobi-Thika Superhighway which included bulbs worth Sh66.5 million which were irregularly procured under a three-year contract signed in December 2018 for Sh528.6 million.
Gathungu notes that the contract was still valid when the Nairobi Metropolitan Services (NMS) began procuring similar equipment, yet no evidence of coordination between KeNHA and NMS was provided.
She also flagged another case involving the Chuka-Kaanwa Road, contracted for Sh233.2 million and expected to be completed by September 2023.
However, as of November 2023, the project remains unfinished without an extension granted. Similarly, the Kaanwa-Wakathite and Wakathite-Kareni roads, contracted for Sh221.4 million and Sh174.4 million respectively, have stalled.
Land compensation
The Nuno-Modogashe Road project has also faced delays due to unpaid land compensation. While the National Land Commission approved compensation of Sh147.6 million, the Auditor notes that Sh125.9 million remains unpaid.
"The delay in payment of compensation dues may lead to public fund losses through litigation by affected individuals," Gathungu warned.
Other projects cited include the Kenol-Sagana-Marua Highway, where pending bills of Sh3.2 billion threaten significant interest penalties.
The dualling of the Sagana-Marua Road has also been delayed due to compensation issues, while the Kibwezi-Mutomo-Kitui-Migwani Road project, valued at Sh18.4 billion, has stalled due to unpaid bills totalling Sh167.9 million.
The audit also raises concerns over unsupported expenditures. According to the report, a cumulative payment of Sh7.6 billion for non-financial assets, including civil works, remains unverified.
Gathungu highlights that the Modogashe Road project underspent its Sh5.95 billion budget by 36 per cent, while unexplained variances of Sh24.4 million in retention money payments were noted in the dualling of Magongo Road.
The report also reveals the risk of additional penalties and interest for failure to clear pending bills, which amounted to Sh846 million for Nairobi's Outering Road and Sh1.6 billion in unpaid land compensation for other projects.
Gathungu also raised concerns over budget distortions caused by unaddressed bills, noting that such obligations create a "first charge" on subsequent budgets.
While the agencies claim to be working with the Treasury to resolve the issues, the Auditor General has criticised their lack of transparency and action in addressing the flagged irregularities.
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