The Ethics and Anti-Corruption Commission (EACC) has revealed an email that could be used to prosecute Kenya Pipeline Company employees who were involved in the fraudulent procurement of hydrant pit valves (HPVs) at the company.
Speaking before the National Assembly Energy committee, EACC officials led by CEO Halakhe Waqo disclosed how KPC officers colluded with international business people to embezzle funds.
According to the commission, Ksh200 million was lost during the purchasing of the equipment.
"On July 16, 2015, we received a report of irregular procurement of HPV complete with isolation valves and two years’ operating spares by KPC at a contract of Sh660 million," Waqo told the legislators.
[caption caption="EACC CEO Halakhe Waqo together with other officials from the commission"]
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The commission further informed the lawmakers that the equipment which was meant to replace non-compliant and defective HPVs at JKIA was to be obtained from M/S Cla-Val Company Ltd, the original manufacturer, based in the US.
"However, evidence gathered indicated a conspiracy by officials at KPC to fraudulently acquire public funds through gross exaggeration of the value of the equipment," the CEO added.
The investigations done by the commission found out that KPC's tender committee met on Dec 9, 2014, and approved direct procurement of the equipment, however, another staffer from the procurement department purported to forward the tender documents via email, seeking quotations from M/S Cla-Val.
"Curiously, the email was also copied to M/S Allied Inspection and Testing Inc of Canada. The email to Cla-Val was never received in the US as it was addressed to sales@cla-val.ca and mikeuffer@cla-val.ca, both addresses for Canada," Waqo stated.
He also revealed that evidence showed that KPC officials were in communication with M/S Allied Inspection and Testing Inc to supply the equipment.
Additionally, he stated: "Available evidence indicates that the said letter is a forgery and Cla-Val is not aware of it. But on December 7, 2015, M/S Aero Dispenser Valves Ltd submitted its quotation for the equipment for Sh663 million. The sum was later negotiated to Ksh660 million.
"The equipment was later supplied by M/S Aero Dispenser Valves Ltd, a briefcase company based at Utalii House, Nairobi. On March 31, 2015, KPC paid Sh262 million to M/S Aero Dispenser Valves Ltd," Waqo commented.
Waqo, together with his team, further asserted that had KPC bought equipment from Cla-Val, it could have cost Ksh59.7 million and not Ksh660 million.
"We have recommended criminal charges against the suspects and EACC will institute a suit for recovery of Sh200 million that was overpaid by KPC to M/S Aero Dispenser Valves. No further payment of the balance of the contract price of Sh400 million will be paid,” the CEO claimed.
[caption caption="Photo of Kenya Pipeline Company tankers"]
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