Work on the completion of a vital section of the multi-billion shilling Kisumu-Kakamega dual carriageway hangs in the balance after a contractor gave the government notice of termination of contract for lack of payment.
The Israeli contractor, SBI International Holdings AG (Kenya), abandoned work on the 8 km dual carriage from Kisumu Boys’ junction to Mamboleo Junction, last December, over alleged accrued unpaid arrears.
The contractor subsequently gave Kenya National Highways Authority (KeNHA) 14 days’ notice to pay up or they terminate the contractor altogether.
The contractor, in a letter dated September 13, wrote to the Director-General of KeNHA, Eng. Peter Mundinia, and gave 14 days to pay or they terminate the contract by September 27, 2019.
The road from Kisumu Boys’ junction to Mamboleo Junction is being jointly financed by the World Bank and Kenya Government at a cost of Sh. 2.6 billion.
During Kisumu County Development Implementation Coordination Committee meeting chaired by the County Commissioner Abdi Hassan and attended by the Director of Presidential Delivery Unit (PDU) Gerishom Wangira, the committee expressed concern over the delay of completion earlier earmarked for August this year.
KeNHA Nyanza Regional Manager Engineer Felix Osongo has, however clarified that the contractor was paid the owing Sh. 300 million arrears but the contractor immediately raised other certificates and demanded immediate payment.
“The contractor has three other contracts with KeNHA, including the Ahero and Kericho Interchanges and the Kisumu Boys’-Mamboleo roundabout interchange,” he stated.
“What the contractor did after being paid the initial amounts, he immediately lumped the three contracts together and raised other certificates and demanded for payment including interest on delayed payment,” added Osongo.
According to Eng. Osongo, the National Treasury was notified of the notice and expressed hope that the matter will be settled as soon as possible.
According to the letter signed by Zeev Jakoby, Managing Director SBI International Holdings AG (Kenya), KeNHA has since November 30, 2018 reneged on employer’s financial management despite the contractors notice of suspension of work dated December 10, 2018.
“Since the date of commencement of the suspension, the amounts due and approved in the said two Interim Payment Certificates (IPC’s) no. 15 and 16 have not been paid,” reads the letter.
Jakoby pointed out that the Dispute Tribunal appointed under the contract urged the employer, in writing and during the hearings to promptly rectify the breaches but this, according to the contractor has not been adhered to.
“In view of the above and to deep regret, we find no alternative but to act in accordance with the provisions of GCC, sub-Clause 16.2 (Termination by contract) and to give you hereby, by this letter a 14 days ‘notice for termination of the contract.’
Upon expiry of the 14 days that lapses on Friday, the contractor says they will claim all damages and losses arising out or connected with the contract.
In the event the contractor makes good his threat, the section of the flyover that is expected to join the one undertaken by a Chinese firm at Mamboleo junction will remain an eyesore.