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KPC Management, Board Disagree On An Extra Ksh500 Million Spent On Kisumu Oil Jetty Project

KPC Chairman John Ngumi. [PHOTO/ COURTESY]

The board and the management at Kenya Pipeline Company (KPC) are at loggerheads over the amount of money used in the construction of Kisumu Oil Jetty project, which has been since scandalised.

According to the board chairman John Ngumi, the board approved Ksh1.487 billion for the project, while the management on the other hand spells another figure of Ksh1.9 billion, hence causing a Ksh400 million discrepancy.

“The board approved a budget of Ksh1.487 billion and this is what went to Cabinet Secretary in the ministry of energy and petroleum for onward transmission to the cabinet secretary for Treasury. I will be surprised if the management passed a budget different from what was approved by the board,” Ngumi told National Assembly committee on petroleum.

On the other hand, KPC acting manager director Pius Mwenda says that the money was approved and released in two baches, in the financial years2015/2016 and 2017/2018.

Read: The Ksh 1.8 Billion Kisumu Oil Jetty Scam Pulled by John Ngumi at KPC

Matters were complicated further when the director of procurement in the National Treasury Erick Korir agreed with Ngumi, pointing out to a possible collusion between the two.

What raises eyebrows is how the management could spent more money, which had not been approved by the board. Further, it raises questions on where the got the the extra Ksh500 million, if it was not released by the Treasury.

“The budget for supplementary presented to the board was Ksh1.487 billion while in 2017/2018, the balance of Ksh500 million was factored and approved in the normal budget cycle. The Ksh500 million was presented to the board and was approved,” said Mwenda.

Several people including former managing director Joe Sang were ousted in the scandal and charged in court. However, Ngumi was accused of engineering their exit to cover-up for for his corrupt ways at the body.

The project which has since stalled was meant to facilitate the transportation of oil through Lake Victoria to Uganda and Tanzania.

However, as the project remains a white elephant in Kenya, Uganda and Tanzania have neither tendered for the construction of their end nor even shown willingness to do the same.

KPC is said to have bought new materials for construction of the project, despite there being existing materials for the same.

Analysts believe that with the materials which were available, KPC would not have spent more than Ksh250 million if it constructed the jetty using own engineers. KPC would have spent a maximum of Ksh600 million to see the completion of the jetty if it were to buy the materials afresh.

The firm has been riddled with graft scandals dating back to 2014  when it tendered to deliver 60 hydrant pit valves for Jomo Kenyatta International Airport at a cost of Ksh647 million.

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Francis Muli

Written by Francis Muli

Senior reporter at Kahawa Tungu, Muli has a passion for human interest stories. He believes in unearthing societal rots that have been hidden from the public eye. He has also carved himself a niche in writing business stories. He has worked for various organisations including Kenya Television Service, Business Today among others. Follow him on Twitter @FmuliKE.

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