The National Assembly’s Departmental Committee on Transport and Infrastructure has reported that the Kenya Railways Corporation lost about Sh91.3 million in the leasing of ten parcels of land.
According to a report by the office of the Auditor-General over Sh21 million collected from land rates were also never banked.
“The Special audit noted that Sh253.8 million was the total amount recorded and invoiced in the availed customer ledger accounts and cash books for the 10 leased parcels of land.
“Out of this, Sh125,965,000 was the amount traceable to the availed bank statement extracts for revenue, Sh24,000,000 being an amount waived by KRC and Sh12,600,000 being an amount invoiced for the year 2020, which was not yet due for payment.
“Therefore, the total of Sh91,245,000 was un-banked revenue,” reads part of the report presented before the Committee by the deputy Auditor-General, Fredrick Odhiambo.
The Office of the Auditor-General was probing how the KRC entered into two long term agreements with M/s. Grain Bulk Handlers limited (GBHL) and M/s. Autoports Freight Terminal Limited.
Kenya Railways MD Philip Philip Mainga.
The committee chaired by Ndia MP George Kariuki was further informed that procedures followed in the contractual agreement between Kenya Railways and M/s. Autoports Freight Terminal Limited were not transparent and lacked the requisite documents with clear audit trail unlike the agreement with M/s. GBHL.
“There were red flags considering the contradicting communication evidenced in the board minutes, the appeal by M/s. Autoports, and the communication by KRC on the board resolutions.
“This therefore, highlights irregularities on Kenya Railways as a procuring entity in entering into a contract with M/s. Autoports on terms that were not approved by the board,” said Odhiambo.
The deputy Auditor-General told the Committee that KRC did not adhere to the provisions of section 11A of the Kenya Railways Act, Cap 397, the Public Procurement and Asset Disposal Act,2015, and the Public Private Partnership Act, 2913 in entering into the lease agreement with M/s. Autoports Freight Terminal Limited.
Therefore, the Auditor-General found KRC culpable of not ensuring a comprehensive framework was developed in identification and implementation of such engagements to be open to interested stakeholders to ensure fairness, transparency, equality and cost effectiveness.
According to Kariuki, the committee will probe the matter further and write a report to be tabled in the House for debate.
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