MPs Expose Sh4.5 Billion Payment Gaps in JKIA Terminal Deal

Kenya’s Parliament is once again spotlighting questionable financial practices, this time tied to the defunct Greenfield Terminal project at Jomo Kenyatta International Airport (JKIA). During a heated session on Thursday, the Public Investments Committee on Commercial Affairs and Energy raised alarm over a Sh4.5 billion discrepancy in payments made to contractors and consultants.

The committee, chaired by Pokot South MP David Pkosing, probed the Kenya Airports Authority’s (KAA) audited accounts for the fiscal years 2018/2019 through 2021/2022. Their findings pointed to glaring financial irregularities and potential misuse of taxpayer funds.

One of the most striking issues was a Sh75 million expenditure in 2014 for the project’s groundbreaking ceremony. Despite lacking any contractual basis, the funds were disbursed as a “contract variation” – a classification MPs challenged. Acting KAA Managing Director Nicholas Bodo explained that the amount covered unbudgeted logistical needs for the high-profile event, officiated by the Head of State under Vision 2030 initiatives.

Bodo claimed the payment was drawn from contingency funds and approved in accordance with the Public Procurement and Disposal Act of 2005. However, lawmakers questioned the legitimacy of labelling ceremonial costs as a contractual variation.

More serious were the revelations that over Sh4.5 billion had been paid out without verified proof of work by June 30, 2019. Of this amount, Sh4.31 billion was advanced to the main contractor ACEG/CATIC JV, and Sh216 million went to consulting firm Louis Berger JV Runji and Partners.

KAA defended the payments, citing an Advance Payment Guarantee and mediation proceedings that eventually ensured recovery or settlement of the funds after the contract was terminated.

Yet another red flag emerged with a Sh7.4 million payout to PricewaterhouseCoopers, despite the contract being terminated under unclear conditions. The committee criticised the lack of documentation verifying contractor and consultant consent to the termination, warning of legal liabilities that could fall on the government.

Supporting documents provided by KAA indicated some disputes had been resolved through mediation and that consultants had acknowledged the contract terminations.

The Greenfield Terminal project was envisioned to boost JKIA’s passenger capacity significantly but was controversially halted in 2016, casting a long shadow over its financial integrity.

The committee concluded by promising a detailed report with recommendations on whether to initiate further investigations or legal proceedings. Lawmakers emphasised the need to strengthen procurement oversight to safeguard public funds from similar discrepancies in the future.

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MPs Expose Sh4.5 Billion Payment Gaps in JKIA Terminal Deal