Taxpayers lose Sh426m in MPs’ offices cost inflation

Taxpayers lost Sh426.4 million to a Chinese contractor hired to build new offices for MPs after payment was made above the agreed dollar exchange rate.

The latest report by Auditor- General shows that Parliament paid the money to China Jiangxi International Kenya which built the 26 storey office block.

The report says no justification was given for the amount paid above the Sh84.0125 per US dollars rate in a contract inked in 2013.

The Parliamentary Service Commission (PSC) chaired by National Assembly Speaker Justin Muturi awarded a Sh5.9 billion contract to the firm in September 2013 to construct the yet to be complete multi-storey office block in 2013.

That year, the shilling exchanged at an average Sh87.41 to a dollar. Currently, a shilling exchanges at Sh108.4 to a US dollar.

“Audit of payment vouchers, completion certificates and supporting documents up to and including certificate number 20 revealed extra expenditure totalling Sh426,400,005 representing loss in conversion of Kenya shillings to US dollars when settling the contractor’s certificates,” the report shows.

The latest audit tabled in Parliament last Tuesday by Leader of Majority Amos Kimunya indicates that Sh2.7 billion has since been paid to the contractor.

The State auditor says although the payments already made represents 46 percent of the contract sum, a physical audit inspection carried out in December 2018 revealed that only the main structure had been completed by that date.

However, the building is currently almost complete with the subcontractors working on interior and outside finishing.

The Auditor-General revealed that Parliament had incurred Sh11 million more on interest on delayed payments to the contractor.

The new office block was initially estimated to cost Sh5 billion.