A House team has ordered an investigation of the contract and construction of a 1,000-bed students' hostel
at Jaramogi Oginga Odinga University of Science and Technology (JOOUST).
MPs on the Public Investments Committee on Governance and Education cited what they called glaring
inconsistencies in contract variations and payments amounting to Sh844 million
for the project in Bondo, Siaya county.
There is also a pending court
battle involving the contractor.
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The project was initially awarded
to Sasah General Merchants in February 2010 at a
contract sum of Sh663.9 million. It was supposed to have been completed within three
years, but it eventually attracted certified payments amounting to Sh844.1
million.
The Auditor General's report for
the 2023-24 and 2024-25 indicated the university could not produce documents
supporting contract variations amounting to Sh180.1 million.
The audits also indicated that
completion and handover certificates were also unavailable to auditors,
although the hostel was already occupied.
The committee also learned that the
contractor has sued the university in Civil Case No. E002 of 2023, seeking
payment of outstanding dues.
The case has raised concerns that
taxpayers could be required to shoulder additional legal costs and penalties if
the dispute is not resolved.
The Auditor General’s Kisumu
regional office warned that the litigation could expose public funds to
unnecessary losses.
“Where a contractor takes a public
institution to court demanding payment, it means the institution risks paying
legal fees and penalties,” CPA Kennedy Ongoi said on behalf of the auditor.
“These are avoidable expenses if projects are
managed prudently,” Ongoi told the committee.
Chairman Dick
Maungu (Luanda MP)questioned
why payments had exceeded the statutory threshold for contract variations
provided under the Public Procurement and Asset Disposal Act.
Committee documents indicated the
project costs had been increased a number of times.
They included additional amounts
of Sh19.8 million, Sh38.1 million, Sh44.1 million and Sh528,000 alongside
another Sh79.6 million classified as "fluctuations."
Maungu said the committee was
struggling to understand the legal basis of the additional payments.
"There is something unique
called fluctuations amounting to Sh79.6 million. We need to understand where
this falls under procurement law because fluctuations and variations are
different. There is a lot of grey area here," he said.
Former Vice Chancellor Prof
Stephen Agong, who appeared before MPs alongside current VC Emily Achieng'
Akuno, distanced himself from the disputed Sh79.6 million. He said it did not
form part of the final accounts he approved.
"The Sh79.6 million was not
in the picture,” he said. “If at all it existed, then it was disputed. The
final account signed by the contractor, the university and the consultants was
only Sh4.8 million, not Sh79 million."
The former VC said part of the
overall expenditure reflected maintenance works carried out after students had
already occupied the hostel.
"The hostel has been
accommodating over 1,000 students,” Agong said.
“Maintenance had to continue,
including after a fire incident damaged part of the roof. Some of those costs
may have been captured in the global figure."
The former VC also awarded
additional maintenance works to the same contractor, saying bringing in new
contractors while students occupied the hostel would have been impractical.
"What would happen is that if
a contractor is already on site and understands the project, they remain
competitive,” he said. “It was not necessarily direct procurement"
The committee was not convinced.
Kilome MP Thaddeus Nzambia said
the matter had become too complex to conclude without hearing all parties
involved.
“We need another meeting bringing
together the former Vice Chancellor, the current one, the auditor and the
contractor because clearly we are not on the same page,” he said.
Lunga Lunga MP Chiforomodo Mangale
Munga demanded all project documents be produced for scrutiny.
“We need all documentation on this
project so we can verify whether due process was followed in the contract
variations and any extensions,” he said.
“The auditor says variations
exceeded the legal threshold, while the former Vice Chancellor disputes that. We
must establish the truth.”
Akuno appealed to the committee to
help resolve the long-running matter.
“I appreciate Prof Agong for
shedding light on this issue,” she said. “We would like to be free of this
matter. Although there is a court case, if the committee can clear up what is
within its mandate, we shall appreciate it.”
Maungu said that many questions
remain unresolved.
“It is clear that the amount paid
exceeded the 25 per cent threshold for variations,” he said.
“It is also clear there are issues
surrounding the so-called fluctuations and maintenance costs. The contractor
says the university still owes him money, while from the university's position,
there are claims that payment may already have exceeded what was due. These are
serious matters.”
The chairman directed that Agong
be supplied with all project documents before the next hearing, after the
former VC complained he had been asked to defend himself without access to the
relevant records.
“I requested these documents
before appearing, but I never received them. It becomes difficult to assist the
committee without seeing the documents because some of these records could even
have been generated after I left office,” Agong said.
