Kimunya at the centre of a row over a Sh55bn airport tender

• New airport plan in jeopardy as minister defies Attorney-General and Cabinet committee to cancel tender award to Chinese company that won bid to build new terminal at Jomo Kenyatta Airport
• Minister instructed KAA board to reverse decision to award the Sh55 billion airport construction project to Chinese company and start the process afresh. The Chinese firm has appealed against cancellation of the tender

According to him, Kenya Airways is expected to make great use of the new facility and “they were not involved in the design. You cannot build without consulting them”.

However, according to documents in our possession, Kenya Airways was involved in the design of the master plan. In March 2010, KAA board papers show the design was changed to accommodate input by KQ and the Ministry of Transport.

Funds to start off the project preliminaries were included in the KAA budget for the current financial year.

Kenya Airways Managing Director Titus Naikuni could not be reached for comment as he is out of the country on official duty.

Mr Kimunya was at pains to justify his reasons for the cancellation given that the reasons he gave the Sunday Nation differed from what he had told the KAA board in January. At the time, he had, in the letter written by his PS, questioned the procurement process and not Kenya Airways’ involvement.

In any event, Mr Naikuni has long pushed for expansion and modernisation of the airport. Kenya Airways’ expansion plan, in which the airline will increase aircraft from the current 34 to 107, requires urgent construction of new facilities.

In a letter to the KAA Managing Director Stephen Gichuki on January 10 this year directing that the tendering process be restarted, the PS, Dr Njiru, said he had been instructed to order a retendering by Mr Kimunya because there was an “unacceptable number” of technical and financial proposals to be considered, the bidders did not provide finance, and that bidders should not have competed on the financial aspect of the project.

KAA wrote back, explaining that contrary to Dr Njiru’s letter, bidders were not supposed to finance the project but to identify a capable financier who KAA would directly negotiate with.

Mr Gichuki said that procedure had been followed “to the letter” and responded to every point raised by the PS.

But a month later on February 10, Dr Njiru responded with new instructions to cancel the tender.

Three days later, Mr Kimunya and Dr Njiru summoned the KAA board and management and asked the board to cancel the tender and restart the process.

After the meeting, KAA wrote to Attorney-General Githu Muigai and external lawyers, seeking legal opinion on termination. Prof Muigai advised against cancellation and said due process had been followed. Cancelling the contract would “undermine the integrity and fairness of the procurement process”.

“We are of the considered opinion that termination of the procurement proceedings after award is tantamount to termination of the contract in the sense that a binding legal relationship already exists between the parties.

“Such termination will prompt the successful bidder to enforce rights under the contract in the form of claim for damages and specific performance,” the AG warned.

On Friday, Mr Kimunya told the Sunday Nation that he had not seen the AG’s advice. “In any event, he’s only a government lawyer”.

The move to cancel the award did not escape attention of the President’s office, where it attracted a dressing down.

“It is in bad taste and disrespectful to the Cabinet to attempt to compel the managing director to undertake such action behind the Cabinet Committee and the Cabinet itself. The board should give time to the Minister for Transport to appraise the Cabinet Committee and thereafter the Cabinet in its next meeting,” Mr Kimemia wrote.

According to Mr Kimemia, the same advice had been given to Dr Njiru during at meeting at the OP.