Kamau, Nduva disown 25-year Duty Free shops deal

April 29, 2015 3:28 pm
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Kamau and his PS Nduva Muli appeared before Parliament's Public Investments Committee and said they were perplexed by the contract but were keen not to be seen to be micro managing the Kenya Airports Authority/FILE
Kamau and his PS Nduva Muli appeared before Parliament’s Public Investments Committee and said they were perplexed by the contract but were keen not to be seen to be micro managing the Kenya Airports Authority/FILE
NAIROBI, Kenya, Apr 29 – Suspended Transport Cabinet Secretary Michael Kamau has disowned a disputed 25-year contract awarded to a company to operate Duty Free shops at the Jomo Kenyatta International Airport, saying his ministry had adopted an arms-length policy over management of the airport.

Kamau and his PS Nduva Muli appeared before Parliament’s Public Investments Committee and said they were perplexed by the contract but were keen not to be seen to be micro managing the Kenya Airports Authority.

Kamau said they decided as a ministry on a policy position to announce the status of the standoff together with the Kenya Airports Authority where businessman Kamlesh Pattni acknowledged that his contract to manage the World Duty Free and the Diplomatic Duty Free had ended and he would be paid an arbitration fee of Sh4.2 billion.

“When we had the information that a new deal had been signed to sublet the entire terminal, I called the MD, and the procurement officer. I know this is micromanaging KAA and I am sorry but I had to do what I could to attempt to reverse the decision,” said Kamau.

Muli who sits on the KAA board noted the fact that the corporation had been making decisions without involving the board saying there was an urgent need to convene a meeting.

“I went to the board to inform them that the matter was not going well, and told them that the board and management needed to look at the issues,” said Muli.

The two have since stepped aside over corruption allegations currently being investigated by the Ethics and Anti-Corruption Commission.

But even as the ministry and KAA grapple with power struggles, the government stands to lose over Sh11 billion if a lawsuit by Pattni challenging his forceful eviction from duty free shops from the Jomo Kenyatta International Airport succeeds.

While appearing before the Public Investments Committee, former Kenya Airports Authority Managing Director Stephen Gichuki admitted to having directed the repossession of the premises saying it was necessary to stop the monopoly by Pattni and also to clear the way for the expansion of the airports’ terminal.

“This contract was a bad contract, that company (Pattni’s) was given authority to carry all Duty Free shops in all the airports and even if we were to construct new ones, it was only him who would provide the service. My focus when I was a director was to find ways to kick him out of that airport,” said Gichuki.

The former MD said his took advantage of the expiring of lease in July 31, 2013 to finally remove him.

“I am the one who removed him completely. I got a technical team of security officers, engineering and administration and we put a team to hire vetted people from outside to come and physically remove the shops. We also involved customs and immigration and we notified them to come and make sure their goods their goods were not stolen,” added Gichuki.

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