Sh24m bond lost, as it was unpaid in cancelled tender
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.