Kenya losses Sh 1.4 billion in yet another scandal involving Chinese contractors

Taxpayer continues to get a raw deal amid rampant corruption and wastage in government

DCI Headquarters along Kiambu road. The DCI has been involved in extensive investigations of rampant corruption and wastage in government

In what is turning out to be a familiar trend, a Chinese firm is on the spot for receiving payment close to Sh 2 Billion for doing nothing.

At the center of the scandal is Hong Kong Offshore Oil Services Limited (HOOSL) that was picked by the Geothermal Development Company (GDC) ) to drill 15 to 20 geothermal wells in Bogoria-Silali in Baringo in 2016.

The scandal has exposed a worrying trend in which foreign companies sign externally funded multi-billion shilling project and receive advance payment guarantee from banks, before pocketing a quarter of contract price.

What follows is a deliberate delay in mobilising for works until the contract expires after which they walk away, leaving the already overburdened tax payer to foot the bill.

Reports indicate that the frustrations has gripped GDC with multiple letters written to the Attorney General and Governor of Central Bank of Kenya as reality that the Kenyan tax payer has been coned yet again.

To execute the suspect fraud scheme, HOOSL reportedly colluded with a local bank in which the payments were made with a report prepared for GDC board by George Muya, General Manager, Strategy peeling off layers of questionable dealings.

The report reveals that, just two months after the contract was signed, on June 17, 2016, HOOSL requesting the advance payment from GDC and requested to be allowed to offer a guarantee from an insurance company rather than a bank.

The request was rejected by GDC prompting the contractor to approach a local bank for issuance of the guarantee.

What followed was a series of requests by the contractor for the deadline to be extended.

With money already with the Chinese, the numerous notices issued by GDC failed to translate into implementation of the project.

Come 2019, the GDC has been left high and dry with nothing to show for the billions paid.



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