The Kenya Pipeline Company (KPC) has dismissed media reports saying the country could lose up to Sh40 billion in a new pipeline project.
In a paid-up advertisement, the Company defended its move to lay a new line from Mombasa to Nairobi saying the move was informed by a 2010 inspection that ruled out repairs to the aging pipeline.
The Company was responding to media reports that the project has been used to looting billions of taxpayers’ money.
KPC managing Director Joe Sang said the tender for the project was above board and the court case challenging the tender award by China Wu Yi was dismissed in June 19, 2014 by High Court Judge Lady Justice Mumbi Ngugi. The Line 5 tender was won by Zakhem Limited.
He also clarified that the tender contract sum was Sh 48.4 billion and not Sh53 billion as was reported bya section of the media.
From the contract sum, KPC was funded the project to the tune of Sh 13.4 Billion and the remaining Sh 35 Billion balance Sang said was sourced from a consortium of banks.
He added that the existing line between Mombasa and Nairobi is 14 years beyond its design life span hence it could be an exercise in futility to have it repaired.
“The existing line between Mombasa and Nairobi (built in 1978) is 39 years old, and 14 years beyond its design life span,” argued Sang in the advert.
“An in-line inspection carried out by NDT Middle East Co Ltd in 2010 indicated that it was not operationally and economically feasible to carry out repairs to the ageing pipeline beyond 2014. This means that the existing line had to be replaced,” he added.