Busia Senator Okiya Omtatah has raised the alarm over the transfer of a Kenya Pipeline project worth Ksh192 million to a private firm, citing three major constitutional violations.
Through a statement released on Friday, June 13, Omtatah referenced a post where he had sought a statement regarding the transfer of the project, expressing his rejection of the response he received from the Energy Ministry on the matter.
“I have rejected the Ministry of Energy’s response regarding the controversial handover of the Kenya Pipeline Company LPG project to a private firm. The reply was shallow and reflected a contemptuous disregard for the Constitution and the laws that protect public assets,” Murkomen stated.
“The Ministry ignored the Public Finance Management Act, the Public Procurement and Asset Disposal Act, and the Companies Act, under which the Kenya Pipeline Company is registered. These laws are not optional. They are the foundation of accountability in a democracy,” he added.
According to Omtatah, KPC had invested Ksh 192M in preparatory work, including demand surveys, environmental and social impact assessments, engineering designs, but argued the project was undermined when the project was transferred without due process.
As per Omtatah, violation of the Public Finance Management Act (PFMA), which advocates for prudent management of public funds, occurred after the project was handed over after much significant investment without a clear, legally compliant process. Such could violate Sections 68 and 73 of the PFMA, which require accountability and value for money in public expenditure.
The Public Procurement and Asset Disposal Act could have been violated in the selection of the Nigerian firm as the new custodian of the project. Omtatah questioned whether the process of selecting the private firm to develop the gas handling facility followed due process, including competitive bidding and transparency.
The PPADA (Sections 45-50) requires competitive procurement processes, transparency, and fairness in the selection of contractors for public projects. If the firm was selected without adhering to these procedures, it could constitute a breach of the Act.
Omtatah had specifically mentioned the lack of details on received proposals and justifications for contracting the firm, which aligns with the requirements of the Public Procurement and Asset Disposal Act (PPADA).
In violation of the Companies Act, Omtatah notes that KPC, as a state corporation registered under the Companies Act, should have followed corporate governance principles and legal obligations in its dealings.
The Companies Act (Sections 143–145) requires directors of a company to act in the best interests of the company and its shareholders, the Kenyan public. If the decision to hand over the project was not in the best interests of KPC or was made without proper board approval or shareholder consent, it could amount to a breach of fiduciary duty.
However, the government, in its response, defended the move, noting that a public-private partnership (PPP) was the best way to proceed with the project. They cited budgetary constraints, arguing that due process was followed in the project’s transfer.
As for whether the Ksh192 million would be recouped, the government noted that upcoming meetings with the firm would be key in finding a working formula for both parties.
