Kenya Pipeline Company (KPC) has refuted grave allegations made in a recent newspaper article claiming it had overpaid a whopping Sh40 billion to a foreign company in a tender for revamping of its pipelines.

The company expressed concern over what it termed as misinformation and deliberate manipulation of facts in the article, which appeared on the front page of the Standard Newspapers on August 20, 2024.

In detailed response to the story headlined "Kenya Pays Sh40b Extra in Pipeline Construction Deal," KPC outlined the timeline of the events and clarified the circumstances surrounding the contract and payments made to Zakhem International Construction Limited.

The state company insisted that it had followed all legal procedures and that the amounts paid were strictly in line with the contract terms.

In its response to alleged corruption in. the payment, KPC outlined the contractual history, starting from the award of the tender to Zakhem in July 2014.

Read More

  1. KPC partners with Syokinet Solutions to spur high-speed internet capacity locally
  2. KPC Foundation's new Sh8 million health center brings relief to Murang'a residents
  3. KPC Foundation's Sh8 million maternity theatre hands Bungoma mothers lifelines

It denied the claim of paying Sh40 billion extra, stating, "All amounts paid by KPC have been rightly determined to have been due and owing to Zakhem in strict accordance with the contract dated 1st July, 2014."

The contract, signed on July 1, 2014, was for procuring, constructing, and commissioning the Mombasa-Nairobi petroleum products pipeline.

The dispute at the heart of the allegations arose from credit facility arrangements between Zakhem and Ecobank, in which KPC was not involved.

The matter escalated to the courts, resulting in a ruling by Lady Justice Mary Kasango on November 29, 2018, which barred KPC from paying any party other than Ecobank Nigeria Limited and Ecobank Kenya Limited.

KPC emphasised that it had adhered to all court orders, including the final decree issued on February 16, 2024, which settled the matter with the disputed sums being USD25,960,083.85 and USD6,018,612.00.

The petroleum products distributor further highlighted that the only amount it held from the contract was USD31,308,249.80, which was in compliance with the court's directive.

KPC further indicated that a separate application by Oilfields Engineering Limited, which sought to stay the execution of the final decree, was dismissed by the court on June 21, 2024, reinstating KPC's obligation to comply with the said decree.

In its statement, KPC reaffirmed that it had not, and did not intend to, pay any extra amount as alleged in the article saying all payments adhered to the contract dated July 1, 2014 and the relevant procurement laws.

The company also criticised the Standard for allegedly failing to seek clarification from KPC before publishing the article, which it deemed misleading and defamatory.

"Had the Newspaper trodden the path of objectivity, fairness, and honesty in reporting, it should have sought clarification from us, and armed itself with the true factual and legal position on the matter before rushing to the printing press," the statement read.

KPC concluded that it is currently considering taking legal action against the Mombasa-Road based media house and the authors of what it has described as an "offending, misleading and defamatory article."