JKIA in tender wrangles after Muhoho exit

By Jackson Okoth

NAIROBI, KENYA: While heavy smoke is still bellowing over a tender to construct a standard gauge railway linking the Port of Mombasa to the border of the Democratic Republic of Congo, the Ministry of Transport is caught up in yet another looming controversy.

This has to do with unexplained happenings around the Jomo Kenyatta International Airport, from a mysterious fire that gutted sections of the facility in August last year to the fierce infighting surrounding tendering for the airport’s Greenfield Terminal.

This bareknuckle boardroom battle saw the exit of George Muhoho as managing director of Kenya Airports Authority, to be replaced by Stephen Gichuki, who was also soon sent on compulsory leave and Lucy Mbugua appointed in an acting capacity.

Under scrutiny by parliamentary watchdog Public Investment Committee is how Muhoho gave a signed consent to give up part of the authority’s property. This transaction happened weeks after he had left office in what the PIC describes as a fraudulent transaction.

Poorly constructed

While making its presentation before the PIC last year, the auditor general queried how Muhoho signed consent to charge a KAA land title as security for a Sh510 million loan advanced to Transglobal Cargo Centre Limited by Standard Chartered Bank Limited.

“We would like to know who owns Trans Global and why the charge was signed and executed months after Muhoho had left office,” said Francis Nyenze, the Leader of Minority in the National Assembly.

Acting KAA Managing Director Lucy Mbugua was at pains to explain to the PIC how the transaction could have been executed, forcing the committee to adjourn its proceedings for five minutes to enable her make consultations with the office.

While Transglobal Cargo Centre, owned by one Peter Muthoka, had an initial lease to build, operate and transfer the cargo handling facility at the JKIA in a period covering 20 years, the agreement has since been restructured and extended to 40 years, with the company free to apply for a further extension of 20 years.

KAA admits this lease agreement has been poorly constructed and that it is holding discussion with Transglobal for purposes of restructuring it. If both fail to agree, the authority will consider taking legal action against the cargo handling firm.

Fierce battle

Questions are also lingering on encroachment of airport land around JKIA, Wilson Airport, Eldoret International Airport and other aviation facilities spread around the country.

“We are seeking a report on who has encroached on airport land around the Wilson facility as well as details on all ongoing projects at the JKIA that are of Sh100 million and above,” said Eldas MP Adan Keynan who is also the PIC chairman.

While investigations into the recent JKIA fire were attributed to an electric fault, questions linger on a list of omissions and intrigues at the facility.

A fierce battle for control of tenders for construction of its third terminal whose work has progressed at a snail pace, fight for control of duty free shops, frequent shortage of jet fuel and the recent fire, all point fingers at vested interest groups fighting for a piece of JKIA.

It can be recalled that only days after businessman Kamlesh Pattni was ejected from the duty free shops and KAA repossessing them, jet fuel ran out at JKIA before a huge fire gutted the place.

The Diplomatic Duty Free Limited Company shops belonging to the controversial tycoon were forcefully taken over by KAA and goods removed.

It has also not escaped many curious observers that Mr Muhoho’s dismissal is still shrouded in mystery.

In 2009, Muhoho had then expressed optimism that his contract at KAA would be renewed, but he received his marching orders even after getting tacit support from the then Prime Minister Raila Odinga. He handed over to his deputy Martin Wamalwa in an acting capacity.

Muhoho departed before shedding more light on the mysterious Qatar-based Afro-Asia Investments Corporation, which was supposed to put up a multimillion shilling hotel complex and expo centre at the JKIA. This is one of the mega contracts that were being questioned.

It later turned out that Afro Asia Investments was a phantom and not even listed in Qatar. The deal to construct these facilities at JKIA was reportedly hatched in Nairobi.

Fourth terminal

In August 2012, the then Transport minister Amos Kimunya was in the line of fire in Parliament after he cancelled a Sh55 billion contract that was to turn JKIA into a continental aviation hub, including construction of a new terminal that would have made it possible for Nairobi to have direct flights with the US.

This tender had been awarded to a Chinese firm in conjunction with a UK company. Kimunya insisted the tender was cancelled amid concerns over the process in which it was done, including speeding up the procurement process and evaluation, all within three days.

Then House Speaker Kenneth Marende ordered a probe into the Sh55 billion tender for the construction of the fourth terminal at the JKIA.

These investigations involved house committees of finance, transport and budget. The Speaker made the directive after a cross section of members expressed dissatisfaction with Kimunya’s explanation as to why he unilaterally decided to cancel the tender that had been awarded by the KAA Board to Chinese firm, Anhui Construction.

Kimunya said due process had not been followed in awarding the tender, but the MPs tabled documents showing that key government institutions, including the Attorney General’s office and the Ethics and Anti-Corruption Commission had okayed the deal.

“I can tell you that I have stepped on so many toes in cancelling this deal that corruption has a way of fighting back,” Kimunya told Parliament.

But even after these revealing statements, work on construction of the delayed Greenfield airport terminal project was cleared to go ahead by relevant authorities and is expected to be complete in 2017.

This project, which includes the refurbishment of unit 1, 2 and 3 at JKIA, will separate the arriving and departing passengers – enabling the airport to handle direct flights from the US. It will also involve the construction of a 5.5km runaway to handle larger aircrafts.

The Greenfield Terminal matter caused uproar when it emerged that the tender for its construction was awarded to two Chinese firms by KAA management without the approval of the Board.

The Public Procurement Oversight Authority later ruled that the tenders awarded to Anhui Construction Engineering Group and China National Aero-Technology International Engineering Corporation were above board and KAA should sign contracts with the firms.

The two companies will build the terminal in collaboration with London-based Pascall + Watson Architects under the supervision of Louis Berger Group head-quartered in Washington DC.