The government was directed to pay Ksh158 million to a firm after President Uhuru Kenyatta ordered the cancellation of a tender awarded to its bus service operating in Nairobi.
Uhuru, in May 2015, was stunned after finding out that the Kenya Airports Authority (KAA) was reportedly paying Ksh11 million per month for five buses that were tasked with ferrying commuters inside the Jomo Kenyatta International Airport (JKIA).
He also learnt that the buses owned by Relief & Mission Logistics were awarded an eight-year tender which would have cost taxpayers over Ksh1 billion.
"This is unsustainable. The people behind it will have to be arrested, taken to court and made to return public funds,” an angry Uhuru who had toured JKIA to open Terminal 2 ordered officially.
Five weeks after the buses were grounded, KAA released a statement explaining the decision made by the head of state. The authority stated that the cancellation was inevitable as the tender was of little public interest and inconvenienced the taxpayers.
It added that the Ethics and Anti-Corruption Commission (EACC) gave them the green light to cancel the tender as KAA had flouted stipulated laws.
Relief & Mission Logistics also filed a suit against KAA, lamenting that it legally won the tender and was at risk of incurring a Ksh245 million loss. The money had been invested in purchasing executive buses and paying taxes to the Kenya Revenue Authority (KRA).
Sole arbitrator, Allen Gichuhi, who mediated the case, noted that KAA failed to offer compensation to the firm and solve the matter amicably. He added that KAA couldn't explain how the tender cancellation would curb the loss of public funds.
Gichuchi contradicted the authority and argued that the tender process was undertaken within the confinements of the law and that Relief & Mission Logistics beat 16 other firms to win the contract.
"From the preponderance of the evidence, the inescapable conclusion is that the respondent had no lawful basis for termination of the agreement summarily and hid behind the cloak of convenience, necessity and public interest.
"I find and hold that the tender process was lawfully carried and was not contrary to the Constitution concerning the utilisation of public funds,” he ruled and directed KAA to pay the firm Ksh158 million.
The company's request to have KAA punished for reportedly damaging its reputation was rejected.
