Sh24m bond lost, as it was un­paid in can­celled ten­der

The Star (Kenya) - - Politics -

A state agency is on the spot for ir­reg­u­lar award of a Sh400 mil­lion ten­der for the con­struc­tion of its head­quar­ters in Nairobi.

The Pub­lic In­vest­ments Com­mit­tee yes­ter­day heard that the Na­tional Wa­ter Con­ser­va­tion and Pipe­line Cor­po­ra­tion awarded the ten­der to Cap­i­tal Con­struc­tion Lim­ited with a Sh24 mil­lion in­sur­ance per­for­mance bond in­stead of a bank guar­an­tee as re­quired un­der the law. The ten­der was awarded in 2008.

The com­mit­tee, chaired by El­das MP Adan Key­nan, was shocked by rev­e­la­tions that Oc­ci­den­tal In­sur­ance Com­pany, which guar­an­teed the bond, has re­fused to pay the money.

NWCPC act­ing man­ag­ing di­rec­tor Andrew Wany­onyi said the in­sur­ance firm moved to court in 2011, three years af­ter the au­thor­ity ter­mi­nated the con­tract with Cap­i­tal Con­struc­tion in 2009 for aban­don­ing the site.

The in­sur­ance firm was sup­posed to pay the money as a bond in case the com­pany de­faulted on the con­tract.

“I don’t understand why the au­thor­ity ac­cepted an in­sur­ance bond in­stead of a bank guar­an­tee. That is ir­reg­u­lar and un­ac­cept­able. It is un­for­tu­nate be­cause that could be a con­spir­acy to de­fraud the pub­lic,” Ki­minini MP Chris Wa­malwa said.

Newspapers in English

Newspapers from Kenya

© PressReader. All rights reserved.