Kenya Pipeline Board and Managers Accused of Stealing Billions From Major Projects

There is massive corruption at Kenya Pipeline Company (KPC) right from the board members, to the ministry and the managers, a letter addressed to the DCI George Kinoti, DPP Noordin Haji, EACC and President Uhuru Kenyatta indicates.

The letter highlights how billions of shillings have been lost through corrupt dealings in various projects.

First is the KPC Line 5 Project contract where a sum of Ksh48.4 Billion was paid and those who benefited from the project include the company’s Managing Director Charles Tanui who is said to have received Ksh300 million in Dubai and another Ksh100 million in Kenya through the brother Daniel Tanui, MD Mitchellcotts, Abdi Hussein MD Nandi Tea and a Mr Terikin of Total security.

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There were also underhanded dealings with Zakhem International Construction (ZIC), a Lebanese company that was awarded Ksh48 billion for a new pipeline from Mombasa to Nairobi back in 2014 and was expected to complete the 450 kilometer pipeline within 18 months.

According to the document seen by Kahawa Tungu a David Muge, who’s post at KPC is not known signed a Ksh6 billion deal with ZIC.

The KPC chair, John Ngumi is also said to have made contact with Albert from ZIC and was paid off with Ksh100 million. Also implicated in the scandalous project that is yet to be completed is Energy CS Charles Keter.

The CS apparently questioned the deal but after a couple of meetings with another ZIC staffer identified as Ibrahim, was silenced with a whooping Ksh100 million.

Also getting a piece of the pie was State Department of Petroleum PS Andrew Kamau who during his visit to the United States between May and June 2018, received Ksh200 million to facilitate the variation payment.

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Public Procurement Oversight Authority (PPOA) Paul Gicheru was instrumental in the cover up of the tender award with after receiving a Ksh10 million reward from ZIC.

Former Public Investments Committee chair Adan Keynan was also paid a sum of Ksh29 million at ZIC offices at Spring Valley. The bribe was meant to silence the entire PIC committee but Keynan did not share the monies as was agreed.

ZIC was then forced to make additional payments to the committee members and then to KPC board of directors and families.

The board and their family members are said to have been offered a fully paid holiday to Dubai and an additional Ksh3 million.

The public firm’s MD Joe Sang, who in June told the Senate Committee on Energy that the line would reach Nairobi by the end of the month was allegedly paid Ksh35 million alongside the Supply and Logistics manager Vincent Cheruiyot.

KPC Managing Director Joe Sang. PHOTO/ COURTESY

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The duo received these payments via Sealing Solution ltd, Oilfield engineering and Boiler Solutions ltd.

The letter also reveals that Chief Technical Manager Elias Karumi and project Manager Kiama were paid Ksh80 million to approve design change resulting in a saving of Ksh300 million for ZIC while the Board Technical Chair Marwa was paid Ksh15 Million to facilitate Design Change.

In the case of the KPC line 6 Sinendet project, 10-inch diametre- 122 kilometres pipeline commissioned in 2016, CS Keter was adversely mentioned and is said to have pocketed at least Ksh60 million through former NSSF Managing Trustee Richard Langat.

Keter in 2017 approved a 30 per cent discount on transit oil products in all the Western Kenya depots, a move aimed at capturing more regional fuel market.

The CS is said to have cancelled the initial tender, awarded to Petrojet Limited and later awarding it to a company only initialized as CPP.

KPC Board of Directors in this particular project were paid Ksh50 million, while Tanui got Ksh28 million, PS Kamau ended up with Ksh50 million and the current MD Sang pocketted Ksh30 million to facilitate the final payments to CPP.

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When it comes to the Kisumu oil jetty project, the KPC board chair Ngumi, with the support of PS Kamau altered the initial Ksh900 million budget to read Ksh1.7 billion.

To make this possible, PS Kamau was paid Ksh100 million while Ngumi received his Ksh250 million share at Dusitd2 hotel through the sub contractor Consilium Dubai.

Kahawa Tungu has also learnt that KPC MD Sang and Cheruiyot were paid Ksh50 million while in Mombasa. The public firm’s evaluation team ended up making some Ksh10 million.

The winning bid was by Southern Engineering Company (SECO) which was in contact with Ngumi and PS Kamau.

In the damning letter, the company has been accused of hiring managers with fake academic papers.

For instance, Peter Mbugua was allegedly dismissed after it was found out that he had fake credentials but had been employed with the support of Ngumi. in fact, one of his referees was PS Kamau.

Also having been wrongfully recruited into Kenya Pipeline is Cheruiyot whose brother Erick Korir was present during his recruitment. The company secretary Gloria Khafafa’s employment is also in question after it merged that she was not qualified for the job at the time of employment.

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It has also been said that there is nepotism within the company, whereby managers manipulate the interview process to favour their kin.

“Evans Nyagaya while working as the acting operations Manager was present in the panel that employed his own son to his department and the decision sanctioned by the fellow panel members and management,” the letter read in part.

The company has also been accused of inflating the cost of items. In the case of a lighting project awarded to ARCHELIS LTD and the JV partner, a call from state house saw the budget revised from Ksh300 million to Ksh800 million.

It said that KPC Director Jerry Simu a son in law to Kenyatta family found his way to State house and made a phone call to MD Sang. The phone was then passed over to Muhoho Kenyatta who then instructed the MD to Consider ARCHELIS Ltd and the JV partner at their inflated price of Ksh800 million.

The MD apparently delivered Ksh20 million to the President’s personal assistant Jomo Gecaga while the JV partner took care of the other interests.

Download the document here. 

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Written by Kahawa Tungu


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