Queries as Westlands market contractor gets Sh224m more

A costly construction delay, contract wrangles and a looming legal battle over construction of the proposed Westlands market will see tax payers cough up more than Sh200 million more to complete the project, Sunday Nation can reveal.

The project whose initial cost of Sh195 million has already been used up, and has dragged for 10 years, was given to another contractor after the Ministry of Transport, Infrastructure, Housing and Urban Development suspended the second firm in a row that has spilled to the corridors of justice.

The new contract amount of Sh224 million exceeds the original contract amount by Sh29 million despite the project having been under construction since 2012 and is said to have  progressed above 80 per cent.

Late payments to Pyramid Construction Limited (now suspended), also saw the ministry pay another Sh31 million in interests to the contractor in March 2017, underlining the wasteful spending that has surrounded the market construction.

Officials from the ministry did not explain why a partly constructed market cost had gone above its original amount, only maintaining that there was no additional cost to the ministry following the latest change of contractor.

Urban and Metropolitan Development Secretary Enosh Onyango said the ministry had decided to terminate the second contractor, Pyramid Construction Limited after it proved slow in completing the facility.

“The delay has not been costly to the ministry in any way. The payment to contractors by the ministry is based on works accomplished and thus it does not attract any additional costs. 

"If at all there will be any losses to the government, they will be settled through retention funds and application of the liquidated and ascertained damages clause,” Mr Onyango wrote in response to our queries.

The project was first mooted in 2007 to put up a modern facility for city traders – a three storey structure with stalls, two lifts and a basement parking according to the ministry tender documents.

Began in 2008

Construction began in 2008 and stalled after the first contractor, Square M was terminated 35 per cent into the project in March 2011, due to “unsatisfactory” performance.

It remains unclear how much had been spent by then but the ministry awarded another tender for Sh195 million to Pyramid Construction Limited to complete the work in 60 weeks in 2012.

Pyramid Construction Limited Director Henry Lelei said disagreements emerged over the real plan for the structure leading to funding deficit when the entire contract amount including the allowable variation of 25 per cent was spent before the market was ready. The scenario prompted the contractor to consult the ministry on the way forward to complete the market in vain. 

“We wrote to them in December 2016 to bring their quantity surveyor so that we can tell how much in terms of work has been done and how much more remains. They refused. They even refused to pay us the Sh72 million outstanding and insisted we should progress with works. We were not certain about the verbal order and when we insisted on a joint measurement to verify the claims, they terminated our contract,” Mr Lelei told Sunday Nation.

He had sought for Sh67 million more to complete the works when the termination letter was sent to the contractor in late May and site hand over commenced without assessing what had been done. 

He claims the move was meant to subject him to losses and re-tender the works to another contractor who would benefit from his undocumented works, material on site and without clear status on what the new contractor was to do.

Went to court
The contractor went to court to stop any further construction of the market pending the joint determination and proper site hand over.

Nairobi High Court Judge, Lady Justice Olga Sewe, on June 27 granted his application halting the construction until the matter was heard but the ministry went ahead to hire a new contractor who is currently on site.

“Pending the hearing and determination of the application and the suit herein, the respondents, their servants, and or agents or otherwise howsoever be restrained from commencing any works on the site and more particularly described on the contract 2007-08/MOLG/MKT/WESTLANDS/UDD-O1, forcefully and illegally assumed by the defendant respondent,” the judged ordered.

Mr Onyango admitted to have received the court order but insisted the ministry had not done anything illegal to continue the works on the market said to be on a race to be launched before the end of the year.

“The matter is in court and we find it prudent to await the court’s decision. However, our position is that the ministry has done the right thing,” Mr Onyango wrote.

The disregard for the court order may lead to another protracted legal battle as the contractor will next week head back to court to file for contempt, another costly affair for the tax payer in legal fees.

“Why would the government disobey a court order, are they above the law? Why is a project which is 85 per cent complete attract another Sh224 million if at all some people are not looking to harvest from it? We were only asking for a joint measurement to see who owes who and then conclude the contract,” Mr Lelei said.