Firm slaps airport authority with Sh35 million bill

The company that procured the controversial airport passenger buses has slapped the Kenya Airports Authority (KAA) with a Sh35.4 million claim for unpaid concession fees and damages.

Auditor-General Edward Ouko says in a new report that Relief and Mission Logistics has invoiced KAA seeking payment of the money.

He said KAA has pending invoices for apron buses amounting to Sh35,431,272 after termination of the contract in public interest for which the authority has been served with a claim for unpaid concession fees and damages.

KAA terminated the Sh11 million ($120,000) per month contract to the company after President Uhuru Kenyatta demanded a probe into the purchase of the five buses.

“Note 52 (contingency) to the financial statements has stated that Relief and Mission has pending invoices for apron buses amounting to Sh34,431,272 after termination of the contract in public interest for which the authority has been served with a claim for unpaid concession fees and damages,” Mr Ouko said in an audit report for KAA books of accounts dated May 24, 2016.

The company directors told a Parliamentary inquiry last year that they had not received a penny despite investing Sh300 million into the project.

Relief and Mission Logistics Limited said it spent Sh250 million to buy the five apron buses and paid Sh45 million in taxes to the Kenya Revenue Authority.

Mr John Gitonga Kihoro, the company founder and director, told the parliamentary Committee on Transport that his company won the open tender to supply five buses in an eight-year concession with the KAA to provide transport services at the Jomo Kenyatta International Airport (JKIA).

“We were to operate a service based on a profit margin. This was a contract signed between us and the authority to provide a service,” Mr Kihoro said while appearing before MPs to defend the deal in July last year.

The company said it would have taken six years to break even in the airport passenger shuttle services business.

Mr Ouko also revealed that KAA has a contingency liability of Sh290 million relating to legal suits involving the authority and the Diplomatic Duty Free limited/World Duty Free that is associated with Goldenberg architect Kamalesh Pattni.

“The note also includes World Duty Free case arbitration award of Sh4 billion ($49,000,000) for which the authority has appealed against the arbitration award and has stated that no provision is required in the financial statements,” Mr Ouko said.

Mr Ouko said KAA owes the Kenya Civil Aviation Authority (KCAA) an amount of Sh538,993,815 being 15 per cent of proceeds from external journeys which is still under negotiations.

The law stipulates that all proceeds of air passenger service charge should be apportioned between KAA and KCAA in the ratio of 85 per cent and 15 per cent respectively for external journeys.