Kenya lost around Sh426.4 million to a contractor hired to build new officers for Members of Parliament after payment was made above the agreed dollar exchange rates.
The report by the Auditor-General revealed that Parliament paid a Chinese contractor – China Jiangxi International Kenya to build the 26 story office block.
According to the report, no justification was issued for the amount paid the Sh84.0125 per US dollar rate in a contract signed back in 2013.
The Parliamentary Service Commission (PSC) chaired by National Assembly Speaker Justin Muturi gave out a 5.9 billion contract to the Chinese contractor to construct yet to be completed multi-story block in 2013.
At the time of signing the contract, the shilling exchanged at an average Sh87.41 to a dollar as opposed to the current exchange – where the shilling exchange at Sh108.4 to a dollar.
“Audit of payment vouchers, completion certificates and supporting documents up to and including certificate number 20 revealed extra expenditure totaling Sh426,400,005 representing a loss in the conversion of Kenya shillings to US dollars when settling the contractor’s certificates,” the report said.
The audit placed before the Parliament by Majority Leader Amos Kimunya indicates that Sh2.7 billion has so far been paid to the contractor.
Even though the payment already made represent 46 percent of the contract sum, the Auditor-General says the physical audit inspection carried out in December 2018 only the main structure had been completed at the time.
The building is, however, almost complete with subcontractors working on the interior and outside finishing.
According to the State Auditor, the Parliament had incurred Sh11 million more on interest on delayed payments to the Chinese firm.
The new MPs’ offices were initially estimated to cost around Sh5 billion.