Kenyans lost more than Sh300 million in the installation of security equipment in various stadiums, as the country prepared for the African Nations Championship, Chan 2018.
Members of Public Accounts Committee (PAC) were on Wednesday told how the firm contracted by State Department of Sports went bankrupt after it was paid Sh330.5 million.
Kenya was stripped off the right to host Chan due to incomplete refurbishment of the stadiums and heightened political temperatures occasioned by the disputed 2017 presidential election.
The committee yesterday learnt that the company disappeared mysteriously after it was paid Sh330.5 million to install security equipment at various stadiums ahead of the African Nations Championship (Chan 2018) that never took off.
The committee, chaired by Ugunja MP Opiyo Wandayi, heard that MS Auditel Limited closed its operations after it went bankrupt, causing taxpayers the loss.
It also emerged that despite going bankrupt and failing to execute the installation, the firm still sought renewal of their contracts and additional payments.
An audit report indicates the firm was paid Sh330.5 million as 20 per cent advance payment based on a security guarantee issued by a bank in Madrid, Spain, which expired on February 28, 2018.
Risk of losing
Auditor General Nancy Gathungu has since warned that the taxpayers were at risk of losing the amount, since the security guarantee had expired.
“It is also not clear when and if the project will be completed, considering the funding was withdrawn by the National Treasury,” warns the audit report.
Details of the loss were laid bare when Sports Principal Secretaries Joe Okudo and his predecessor Kirimi Kaberia appeared before the watchdog committee.
Garissa Township MP Aden Duale said the committee had unsuccessfully tried to locate offices of the firm so they could appear for grilling over the questionable contract.
“As a committee, we were unable to confirm whether this company is in existence or not. We could not even get them to come before us. Auditel had an office in Lavington and Westlands, but after being paid disappeared into thin air and could not be traced,” said Duale.
Tongaren MP Eseli Simiyu said it was a grave matter for a company to be paid then disappear without meeting its side of the bargain.
“This raises questions as to whether Kenya was benefiting from the deal in any way,” he said.