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Court overrules KAA board in Sh55bn airport tender row

The controversy surrounding the Sh55 billion Greenfield Terminal at the Jomo Kenyatta International Airport took a new turn on Monday after a Nairobi court revoked the suspension of the Kenya Airports Authority’s chief executive.

Industrial Court judge Byram Ongoya ordered the Kenya Airports Authority Board to immediately reinstate managing director Stephen Gichuki until the dispute is resolved.

Mr Justice Ongoya directed that the board chaired by former Runyenjes MP Martin Nyaga Wambora appear before him on Friday for an inter-parties hearing.

The board had on Friday last week sent Mr Gichuki on compulsory leave to facilitate investigations into how the tender for constructing the terminal was offered to Anhui Construction Engineering Group of China and later cancelled by Transport minister Amos Kimunya.

The court order is the latest episode in the falling out between the KAA management on the one hand and the board and Mr Kimunya on the other.

It came on the same day that the Public Procurement Oversight Authority cancelled a press conference where it was expected to rule on an appeal filed by the Chinese company over the proposed cancellation of the tender. The press conference was postponed to Wednesday.

Tuesday, Justice Ongoya certified Mr Gichuki’s application for reinstatement as urgent and said he could continue discharging his duties.

Last week, Mr Wambora said that Mr Gichuki was sent on compulsory leave to allow investigations on the tender for the construction of the second runaway at the JKIA.

The terminal will be dedicated to the use by Kenya Airways and its Star Alliance Partners although the national carrier has expressed concerns over its design.

In sending Mr Gichuki on leave, Mr Wambora said notification of the award was done without the the board’s approval. The board appointed Mr Mathew Wamalwa to Mr Gichuki’s position in an acting capacity.

Mr Wambora said that although the project was approved in principal by the board at a projected cost of $500 million (Sh42 billion), the contract sum of the winning bidder was $654 million (Sh54.9 billion).

Transport minister Amos Kimunya stopped the multi-billion shilling project, saying he suspected corrupt dealings in awarding the tender to Anhui Company.

His directive was supported by the board. Mr Gichuki, however, sought legal opinion on the repercussions of the cancellation and was advised by the Attorney General Githu Muigai not to cancel the tender.

Two weeks ago, Mr Kimunya told Parlimaent that the speed at which the tender was being processed was suspect.

The minister said he received a letter from the Prime Minister’s office through his PS, Cyrus Njiru, advising KAA to stop the tender and seek a Cabinet memorandum given the enormous resources of the project.

Mr Kimunya said the KAA management disregarded the directive and awarded the tender to Anhui which then entered into a joint venture with the China Euro International Company.

On Thursday last week, Mr Gichuki told three parliamentary committees that the Greenfield Project had not been cancelled although KAA was under pressure from the Transport ministry to halt the project.

“I am finding it very difficult to cancel a tender that has already been awarded,” he explained, arguing that letters from the Attorney-General and the authority’s external lawyers warned of compensation risks in stopping the tender.

He, however, said he was awaiting a Cabinet decision on the matter but insisted that cancelling the tender would undermine the procurement process.

Last Wednesday, the KAA board announced the establishment of a committee of stakeholders which it said would insulate JKIA from procurement challenges like those witnessed in the Greenfield tender.

Members to the committee that would be charged with steering the project would be drawn from Kenya Airways, the Kenya Civil Aviation Authority (KCAA), Vision 2030 Delivery Board, the Attorney-General’s Office, the Treasury and the KAA Board.

The expansion of JKIA into a world class airport facility and hub for Kenya Airways is aimed at increasing visitor numbers and improving cargo facilities.

However, Kenya Airways, has raised issues with the conceptual design of the new terminal whose continued delay could derail its expansion plans.

Tuesday, Kenya Airways managing director Titus Naikuni told media that delays in putting up the project could see the airline scale down its expansion plans.

“It’s not that the current design is a disaster but it will make us uncompetitive in the long run. Our profitability as an airline could be impacted by the delays as well,” he said adding the passenger projections for the terminal were ambitious.

Mr Naikuni said he supported the setting up of the steering committee, saying the airline had hired consultants to advise on the options available.

The airline hired Avia Solutions, a General Electric-affiliated company specialising in airport solutions and airline planning to find the best workable option. The company was to work together with Ricondo Association.

KQ favours a modular airport design, which would allow for easier expansion and flexible facilities compared to the current design in the form of an X.

Modular designs have been used in major airports globally including London’s Heathrow, Beijing Airport, and Chicago’s O’Hare.

“You don’t have to build capacity that will not be fully utilised. Someone – either passengers or tax payers – has to pay for this idle capacity. It is more viable to expand according to demand,” he said.

Minutes from KAA board meetings, however, show that the projections used in the master plan were pegged on Kenya Airways forecasts.

KAA’s managing director Stephen Gichuki told media , that some of the contractual designs that the airline had raised issue with had not been arrived at.

“I thought they would be complaining on oversupply of capacity. Twenty million passengers a year will take long to utilise and there is room in the design for future expansion,” Mr Gichuki said.

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