kenya pipeline company, joe sang

The Kenya Pipeline Company (KPC) Managing Director Mr Joe Sang has refuted media reports indicating that the company has lost at least Ksh70 billion in several cases of misappropriation of public funds.

In a press statement, Mr Sang indicated that the company has not lost any money and that media reports are out of malice.

“In the recent past, we have seen allegations circulating in media stating that KPC has lost Kshs70 billion, and today, Kshs 95 Billion of taxpayer’s money. We find these allegations quite inaccurate, astonishing and maliciously calculated to injure KPC as a responsive organization that is currently fulfilling its mandate to the Kenyan people,” stated Sang.

According to media reports, the company has lost billions of money through flawed tendering processes, inflated prices and scandalous deals, in which the Managing director has denied.

The state owned company is under investigation by the Ethics and Anti-Corruption Commission (EACC) for alleged corrupt awards of tenders to specific companies. In one of the cases, Zakhem, a Lebanese firm, was awarded a tender to build a new pipeline in 2014 at a cost of more than Ksh48 billion.

“The contract was signed on 1st July 2014. However, Zakhem did not commence works immediately due to several legal challenges to the award. Once the cases before the Public Procurement Appeals Review Board and the High Court of Kenya were resolved, Zakhem commenced work. It is not true that the project has delayed for 43 months. The amount paid to the contractor so far is 97.3% of the contract sum as compared to 99.5% completion of the project. This amount is paid directly to the contractor by the syndication of lenders after measurement and confirmation of works done,” argues Sang.

Read: Ministry of Agriculture fails to appear before PAC to explain Ksh 1.9 billion saga

So far, three company officials have been sent on leave to pave the way for investigations on alleged tender irregularities at the company.

General Manager, Finance, Samwel Odoyo, Procurement Manager Nicholas Gatobu and specialist welder Amina Juma are being investigated over a Ksh600 million tender for supply of hydrant valves for use at the Jomo Kenyatta International Airport in 2014.

Sang has also denied that KPC has experienced fuel thefts, terming it ‘normal’ losses incurred due to the nature of the product (petroleum).

“During the operation of a pipeline, operational losses will occur due to the nature of the product and allowable loss from measuring equipment. KPC through the transport and storage agreement with the Oil Marketers allows for 0.25% per 1 million litres. KPC has over the years reduced the losses from 0.2% per 1 million litres in 2015 to a current average of 0.1% per 1 million litres in both 2017 and 2018. There is therefore no such theft of Kshs950 million as alleged,” says Sang.

Other tenders and deals reported to be part of the graft include the Fibre Optic Project (Ksh800 million), SCADA project (Ksh8 billion), Ksh1.2 billion automation project, Sinendet-Kisumu Pipeline (Ksh4.9 billion) among others.

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