The state agency has failed to account for Sh1.8 billion ($180 million) it used to buy two ferries from Turkey. According to Kenya’s Auditor-General’s report for the financial year ending June 2018 tabled in parliament, KFS was unable to confirm the validity of the building and supply of the ferries and the accuracy of the cost.
In his report, Mr Edward Ouko said KFS made a down payment of Sh598 million ($5.98 million) to the local appointed agent in August 2015, but failed to withhold the six per cent Value Added Tax (VAT) of Sh35.8 million ($3.58 million) and another 20 per cent withholding tax totalling to Sh119.6 million ($11.96 million).
“In the light of the foregoing, it has not been possible to confirm the validity, accuracy and completeness of the building and supply of two new ferries at a cost of Sh1.5 billion paid to the contractor as at June 2018,” reads the audit report.
The Auditor-General further faulted KFS for failing to adhere to the professional advice of Kenya Revenue Authority to subject payments to the above taxes.
The report said despite a signed agreement dated June 27, 2015, indicating that the new ferries were to be delivered after 17 months, they had not been delivered during the conduct of this audit in November last year.
The first ferry — MV Jambo — was delivered in July 2017 but the second ferry -- MV Safari -- is yet to be delivered.
The Auditor-General’s efforts to get a confirmation of the exact amount the supplier had received from KFS and the outstanding balance were also fruitless as an email to the Turkish supplier, dated January 9, 2019, was not responded to.
Currently, four vessels, the MV Likoni, MV Harambee, MV Nyayo and MV Kilindini are operating at the Likoni channel and cater for the hundreds of the ferry users.
