Connect with us

Hi, what are you looking for?

Capital Business
Capital Business

Kenya

KPC managers sacked over scam

NAIROBI, Kenya, Jun 23 – The Energy Ministry has defended itself over accusations that the taxpayer could have lost Sh6 billion in a fresh oil scandal.

Energy Minister Kiraitu Murungi told a press briefing on Monday that the money referred to in one of the local dailies is Sh580 million and not Sh6 billion, and it arose from a change in the scope of work in the contract detailing the Mombasa-Nairobi capacity enhancement project.

“We were all concerned about the delay of the project (which was supposed to have been completed by August) so I ordered that it be implemented with no more extension on time and that it be commissioned by the end of October 2008,” he said.

The Kenya Pipeline Company (KPC), which was overseeing the project, was also directed to internally finance the cost overruns, which the Board Tender Oversight Committee said would help meet the project’s objectives.

The Minister, who was at pains to explain why the project, which was expected to improve the pipeline product flow rate to 880,000 litres per hour, was commissioned before its completion said several pumps need to be fitted before this capacity can be realised.

“The envisaged flow rate cannot be achieved without the installation of three AGO booster pumps at the Kipevu Oil Storage Facility (PS 14). This was an omission and currently the pumps are to be installed before the end of 2009,” he said.

After meeting the KPC Board, it was agreed that investigations into variations be carried out to determine whether there had been any ‘omissions and commissions’ and what actions needed to be taken.

Mr Murungi however disclosed that several senior managers at the Kenya Pipeline, who are believed to be involved, have already been sent packing.

At the conference, KPC acting Managing Director Selest Kilinda said that although the project is estimated to have cost Sh8.59 billion, they have paid claims worth Sh6.97 billion, while the reminder would be settled once the probe into the deal is completed.

Advertisement. Scroll to continue reading.

“Pending claims are either being negotiated but some are estimates as they relate to time claims because of the delays in the project,” he said.

The Public Procurement Oversight Authority is reportedly carrying out independent investigations into the variations and once the final report is drafted, Mr Murungi said he would table it before the Parliamentary Committee on Energy for further action.

This alleged scam comes hot in the heels of another Sh7.6 billion rip-off which resulted from KPC’s decision to release fuel to Triton Petroleum without authorisation.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...