Govt seeks to recover Ksh 4.5 billion from Greenfields contractor

A legal battle looms between the government and the contractor of the Greenfield Terminal after the cancellation of the contract.

According to the Ministry of Transport, no financing agreement had been signed between the government and China’s Anhui Construction and China National Aero-Technology International Engineering Corporation for the construction of the Ksh 56 billion terminal at the Jomo Kenyatta International Airport (JKIA).

“This contractor went on site without the financing agreement having been signed. You don’t do that. Any project you get into you only go on site after the financing agreement has been done,” Transport Cabinet Secretary James Macharia said in an interview.

The Chinese firm is said to have dug the foundation for the project and was in the process of mobilizing equipment to kick start the project.

The Kenya Airports Authority (KAA) announced the cancellation of the Greenfield terminal project on Tuesday arguing the project was no longer economically viable.

However, the sudden cancellation of the contract is set to bring a legal hurdle for the government. But the Transport CS insists there was no binding agreement between the two parties.

“There are issues the legal counsel on both sides will need to sit and agree whether indeed we had genuine contracts or not,” CS Macharia said.

At the same time, the Transport Ministry is seeking to recover Ksh 4.5 billion already paid to the contractor. The money was part of an advance payment to the firm, which the Cabinet Secretary said would have to be paid back to the government since no work had been done.

“Given that no work has been done so far, we anticipate that for the advance payment, we will sit down with the contractor for some of it to be refunded back to government. By doing that we will save Kenyans a lot of money,” he explained.

The Greenfield project has been marred with controversy ever since it was conceptualized. Tendering and financing for the project were among the sticky points for the project. The National Treasury failed to allocate the project any funds in the estimates for the 2016/2017 financial year.

The terminal was expected to increase JKIA’s handling capacity to 20 million passengers per year. KAA, however, said ongoing refurbishment and modernization of the airport had changed the dynamics, making the project economically unviable.

Originally built to handle 2.5 million passengers, JKIA’s facilities have been stretched to accommodate 6.5 million passengers. The airports authority expects to increase capacity 10 million passengers by next year.