KPC faulted over irregular payments and conflict of interests

Kenya Pipeline Corporation (KPC) has come under renewed criticism over questionable expenditure resulting in the suspected misappropriation of Sh7.1 billion.

The Office of the Auditor-General has queried the Sh1.9 billion Kisumu Oil Jetty project, Sh4.3 billion legal fees, Sh300 million overtime allowance, and Sh509 million subsistence allowance.

Also queried is Sh72 million in motor vehicle expenditure, and Sh24 million contract.

For a second day running, the National Assembly Public Investment Committee (PIC), chaired by Mvita MP Abdullswamad Nassir, took KPC’s acting managing director, Hudson Andambi, to task over the conduct of one of the board members in the questionable deals.

The committee heard that a lawyer who represents an oil marketer embroiled in Sh4.3 billion debt talks with KPC chairs the finance committee of the corporation's board which recommended that the money be set aside as bad debt.

The committee heard that Jenaro Kibet chaired the meeting that resolved that the Sh4.3 billion owed to Kenol/Kobil Ltd be set aside pending its writing off, as the matter had taken too long to be resolved.

The committee demanded to know why a board member with interests in a matter touching on the company chaired a meeting to discuss his client on matters finance.

“Are you aware that the lawyer who represents a company the corporation is involved in a matter in court is the same person chairing the board's finance committee deliberating on the matter?” asked Mr Nassir.

Audit report

Mr Andambi told the committee that he came to learn that Mr Kibet was affiliated to Kenol/Kobil when the audit report came out.

“The issue of conflict of interest was never declared until when the audit report was made public to the board. That’s when Kibet excused himself, but before that, I am not aware if he ever declared an interest,” said Andambi, who was put under oath after members protested that he was misrepresenting facts.

Andambi told the MPs that impunity reigned at the corporation and that cartels and staff steal, manipulate tenders and contracts at will. He admitted that this had resulted in the glaring queries raised in the audit.

“I came, found the mess and I am now trying to clean up. I have been trying to rectify things by putting stringent measures to address the problems,” he said.

The MPs also questioned the firm’s non-adherence to the Salaries and Remuneration Commission (SRC) guidelines on subsistence allowances.