Kenya: Chinese Firm Disowns KPC Expert in Sh4bn Pipeline Delay Saga

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A consultant hired to oversee the construction of the Mombasa-Nairobi pipeline now says he was not consulted when Kenya Pipeline Company (KPC) and a Lebanese contractor agreed on a Sh4.4 billion penalty for delays in building the 450km pipeline.

Mr Xiang Yang, the project manager of Shanghai Little Eagle Science&Technology Co. (SLEC) told Parliament that a scheduler hired to come up with compensation figures did not contact him when it arrived at the compensation payable to Zakhem International for costs arising from four extensions of time (EOT).

“For the expert scheduler who reviewed contractors claim, we got the report this Tuesday evening. I just read it generally and I see issues of engineering and designs. During the review of the contractors claim, the third party expert scheduler never consulted us. We have many documents that show contractor and his vendors did not meet contract requirements,” Mr Yang told the Public Investments Committee (PIC) chaired by Mvita MP Abdulswamad Nassir.

President Uhuru Kenyatta has directed KPC to seek a second opinion on payments of Sh4.4 billion.

Through the Head of Public Service Joseph Kinyua, Mr Kenyatta wants KPC to find out whether the claims that the oil firm and Zakhem International have settled should be paid.

Petroleum Cabinet Secretary John Munyes said an inter-ministerial committee comprising the presidency, the Treasury, KPC and Zakhem were put together by Mr Kinyua to look into the pending claims.

Zakhem had put in a Sh18.4 billion claim but the expert scheduler reduced it to Sh4.4 billion. “We will seek the directions of the Speaker to see whether Parliament can hire an independent third eye to help us ascertain the Sh4.4 billion claim,” Mr Nassir said.

Mr James Mwangi, an engineer who accompanied Mr Yang told the committee that he was only involved in drawing the terms of reference for the expert scheduler on behalf of KPC but the scheduler did not contact SLEC while coming up with the Sh4.4 billion compensation claim.

SLEC accused Zakhem of occasioning delays in the construction of the pipeline by failing to meet designs specifications drawn by the consultant.

Two weeks ago, the KPC managing director Joe Sang told PIC that the expert scheduler M/s Nyara consulted SLEC before arriving at the figure, a claim that Petroleum principal secretary Andrew Kamau disputed. Mr Kamau told MPs that M/s Nyara did not talk to SLEC when it came up with the Sh4.4 billion settlement.

“The job of a scheduler is to speak to the contractor, engineer or engineer’s representative and come with a picture what was supposed to happen at that point.

“This scheduler didn’t speak to an engineer or engineer’s representative. That is a fact,” Mr Kamau said.

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