Kenya has opened compensation talks with China National Aero-Technology International Engineering Corporation (Catic), the Chinese firm that was contracted to build the second terminal at the Jomo Kenyatta International Airport (JKIA) was cancelled amid fears a standoff could cost taxpayers.
The Kenya Airports Authority (KAA) board has approved negotiations the firm who are demanding Sh22 billion for termination of its contract. The talks mark a reversal from Kenya’s earlier position that the Chinese firm should refund Sh4 billion down payment for the project that never took off. The government has since 2016, when the JKIA contract was cancelled, argued that no work was done at the airport despite Catic receiving money from the State.
“The KAA board has approved negotiations of the contractor’s claim and has constituted a team to do so, preparations on the talks are at the moment going on. The team is supported by external legal and technical experts. Preparations for negotiations are on-going,” said the authority.
The tender was cancelled in March 2016 after Sh75 million had been spent on a ground-breaking ceremony that was presided over by President Uhuru Kenyatta on May 23, 2014. Some Sh129.9 million was paid to a consultant, Louise Berger, while PriceWaterHouseCoopers got Sh7 million for its role in securing the financier of the project.
Documents tabled before the Public Investments Committee (PIC) show that Catic wants the KAA to pay it Sh2 billion for the preparation of bill of quantities (BOQ), Sh2.4 billion in extra costs and Sh708.2 million being 16 per cent value added tax (VAT).