How Former KPC Manager Elias Karumi and Associates Were Paid Ksh 1.2 Billion For Doing Nothing

Revelations that the Kenyan government was conned in the construction of the second pipeline from Mombasa to Nairobi has continued to jolt KPC and Ministry of Energy officials even now with new information emerging over the deal clouded in open fraud.

According to Kenya Pipeline Company (KPC) insiders, the blame for the flaws in the pipeline and fraud should be laid at the door of former KPC Chief Technical Manager Elias Karumi.

According to our sources, it is Elias Karumi who stole the original design for Line One (Mombasa – Nairobi) and used the same to win a lucrative contract worth Ksh 1.2 billion in partnership with Shengli Engineering and Consulting Company Limited (SLECC), a Chinese firm.  Shengli Engineering and Kurrent Technologies had no expertise or experience to design and supervise the line despite being awarded the contract.

READ: DCI Summons Joe Sang, 11 Others Over Ksh70 Billion Loss At Kenya Pipeline

According to sources within, Elias Karumi through his conduits formed a local company, Kurrent Technologies Limited, which became the local partner of Shengli Engineering in the contract for the design and supervision of the building of a new Mombasa-Nairobi refined fuel pipeline.

The partnership of Shengli and Kurrent was awarded the line design and supervision contract in 2012 while Zakhem won the tender to construct the line in 2014.

The new line was to run parallel to the only existing line, line one, from Mombasa to Nairobi but ended up crisscrossing the original line at least 15 times.

Furthermore, the new line was located just ten meters from the original line despite there being a thirty meters allowance (Right-Of-Way) purchased by the government for the same.

According to insiders aware of the intricacies, after Shengli won the bid, they were forced to look for local partners, Kurrent Technologies which was quickly put together by Elias Karumi and his associates. Mr. Karumi then went ahead and stole the original design of the existing line because he was not ready to have the newly former partnership do the work of designing and supervising the new line as contracted.

READ: KPC Manager Joe Sang Unable To Account For 23 Million Litres Of Fuel

What Kurrent Technologies forgot to do was to steal the Line One’s “as-built” design and not the blueprint of the same which was the original design of the line. There were many revisions to the blueprint resulting in the latest design being the “as-built” version.

After winning the contract, Kurrent Technologies and Shengli Engineering used Elias Karumi’s might at KPC to have the company’s engineering department staff supervise the construction while the said staff didn’t have the required skills to oversee the same. They did it because Karumi through the Shengli and Kurrent partnership was paying them at least Ksh 6,000 each day they reported on site. The payment stopped within less than a year as the corrupt duo was not ready to spend despite winning a multibillion contract and doing nothing on it.

Kenya Pipeline has the following Pipeline;

• Line 1 and 5 – Mombasa to Nairobi
• Line 2 and 4 – Nakuru to Eldoret
• Line 3 and 6 – Nakuru to Kisumu

The Line 5 (Mombasa to Nairobi) has faced various challenges including being poorly designed, located and implemented without a facility to monitor leakages. Sources within Kenya Pipeline have intimated to us that Elias Karumi personally opposed calls to implement modern leak monitoring on the line. Now KPC staff enrich themselves by siphoning fuel from the line.

READ: KPC Executives Likely To Face Charges Over Illegal Design Changes On Leaky Oil Line

Calls to have DCI and EACC investigate the scams have hit a dead end as the officers who are supposed to investigate these complicated scams lack the requisite skills to do peruse the contracts and arrest the culprits who are openly roaming around and enjoying the loot.

Zakhem has recently issued a statement insisting that they were not to blame for the mess created by KPC and the design and supervision contractors. Part of the statement reads;

“The progress of the works suffered from major interruptions that eventually necessitated an extension of the contract period as approved by the KPC board and solely attributed to KPC consultant massive design and engineering errors, variations, corrections, omissions, additions, and revisions.” 

“Variances between the design and the actual situation on the ground became apparent when the contractor commenced implementation. Several revisions and corrections, all documented had to be made on the design package especially civil and mechanical drawings, which resulted in extensive procurement of additional materials and later revisions in the mechanical installation work.” 

Already Kenya Pipeline has paid 95 percent of the amount despite the contractors doing nothing and employing no one to justify the cost. In fact, the Chinese owners of Shengli Engineering operated from a residence behind Panari Sky Hotel and flew out of the country immediately questions were raised over the deal. They also made sure that they properly oiled the palms of senior officials at the Ministry of Energy to avoid being asked hard questions over the deal.

From the proceeds, Elias Karumi has built the Alpine Hotel in Nakuru, among other properties.

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