Parliament orders KAA to reveal details of compensation talks
Parliament has issued an ultimatum to the Kenya Airports Airport (KAA) to reveal details of secret talks with a Chinese firm whose Sh55 billion contract to build the second airport terminal was cancelled.
The order came amid fears that the botched deal could cost taxpayers hundreds of millions of shillings in compensation.
The National Assembly’s Public Investment Committee (PIC) has given the airports manager till Tuesday to reveal details of compensation talks between the State and China National Aero-Technology International Engineering Corporation (Catic).
Reports indicate that the Chinese firm is demanding Sh4 billion in addition to another Sh4 billion it had received for works done since 2014 and further compensation for loss of business and anticipated profits.
“This committee is giving you until Tuesday next week to provide all information regarding the Greenfield project,” said PIC chair Adan Keynan.
The committee wants to know how much the Chinese firm is demanding, how much has been paid to Catic so far and compensation for the breached contract.
The MPs want to be told why the Sh55 billion contract was cancelled and the views of the Attorney-General on its cancellation.
The Attorney-General’s office had in March said the KAA may not have sought legal advice before terminating the contract, exposing the taxpayer to the burden of footing the heavy litigation and damage fees associated with the legal battle should the courts decide in the contractor’s favour.
The KAA was Tuesday fretful that the fallout in the wake of the cancellation of the contract could end up in court.
“If we discuss our position publicly it will jeopardise our position if we go into arbitration because there is high likelihood this will happen,” KAA company secretary Catherine Kisila told PIC.
The hardening of positions between the government and Catic has stalled talks, prompting the hiring of advisers to determine who owes the other.
The KAA in March scrapped plans for a new terminal building at JKIA, whose construction President Uhuru Kenyatta launched in December 2013, due to financial pressures and excess capacity caused by recent upgrades to existing facilities.
Catic had been selected to build the Sh56 billion terminal, which was expected to handle 20 million passengers a year.
The contractor had already mobilised 90 per cent of the equipment required for execution of the work. Thirty per cent of detailed designs had been submitted and reviewed while 60 per cent was on-going at the time the decision was made to discontinue the project.
The government has said the work done by Catic was not worth Sh4 billion.
The project had been dogged by a series of controversies, including the battle over the award of the tender that at one point implicated former KAA managers in corrupt deals before the Ethics and Anti-Corruption Commission (EACC) cleared them.
The government opted for the construction of the second runway instead, noting that the current one in use has been overwhelmed.
The ministry of Transport says design work for the second runway at the JKIA will be completed by February next year, paving the way for the construction.
