Senate directs Auditor General to look into the Sh48Bn Mombasa-Nairobi pipeline

June 21, 2017
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Kenya Pipeline is seeking to build a new 20-inch oil pipeline from the port of Mombasa to Nairobi to replace the existing 14-inch that has been operational for the past 36 years.
NAIROBI, Kenya, Jun 21 – Senate Committee on Energy has ordered a forensic audit on the construction of the Mombasa-Nairobi pipeline.
Senate Clerk Jeremiah Nyegenye, in a letter dated June 13, has asked the Auditor General Edward Ouko to undertake the audit within 90 days from June 14.
The audit comes after concerns that the project, whose initial cost was Sh48 billion, will incur an additional Sh11 billion due to ‘challenges and errors’ the contractor blamed on the Kenya Pipeline Company.
In the letter, Ouko is directed to establish whether the advertisement, processing and award of the contract was above board.
Ouko is also expected to establish the professional suitability of the contractor and subcontractors and carry out a value for money assessment on the project.
The Senate Committee also wants the Auditor-General to establish the accuracy and validity of the extension periods that occasioned the extra costs.
The Committee says the additional expenses allegedly arose after the main contractor asked for an extension period of 12 months to complete the project.
“However, the contractor asked for an extension of 5 months in January 2016 at a cost of Sh4,292,801,635 and a second extension in September of 7 months at a cost of Sh6,748,003,213,” the Committee said.
Kenya Pipeline is seeking to build a new 20-inch oil pipeline from the port of Mombasa to Nairobi to replace the existing 14-inch that has been operational for the past 36 years.
The 14-inch pipeline cannot meet the increasing demand for petroleum products despite the government’s Sh7.8 billion investment in 2008 that was aimed at doubling the flow rate from 440,000 litres an hour to 880,000 litres.
The cost of the much-hyped vision 2030 flagship project is expected to inflate due to contract variation and an unfavorable dollar-shilling exchange rate, all at the cost of the taxpayer.
The project is set to ease the flow of refined oil products to the market from the Port of Mombasa but it is behind schedule and is unlikely to be completed by September 30 as planned.
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