Editor's Review

President Uhuru Kenyatta questioned a contract awarded to a logistics company by KAA prompting its cancellation.

The Kenya Airports Authority (KAA) is set to pay Ksh158 million to a airport shuttle bus company after President Uhuru Kenyatta prompted the cancellation of their contract six years ago.

The arbitrator, Allen Gichuhi awarded the company-Relief & Mission Logistics, the money, noting that KAA failed to prove how public interest attributed to termination of the contract.

The company had been awarded an eight-year contract to ferry passengers from the airside at the Jomo Kenyatta International Airport (JKIA) in 2014.

In May 2015, the Head of State while visiting the airport, questioned how KAA would pay Ksh11 million per month for 11 buses. This led to a legal dispute.

KAA in its termination letter, stated that the action was out of convenience, necessity and public interest.

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“From the preponderance of evidence, the inescapable conclusion is that the respondent had no lawful basis for termination of the agreement summarily and hide behind the cloak of convenience, necessity and public interest,” Gichuhi ruled.

Relief & Mission Logistics argued that terminating the contract caused it to lose millions in revenue and dented its reputation.

KAA had previously sought to pay and settle the issue with the company, however, the two failed to reach an agreement.

KAA had challenged the power of an arbitrator in determining the issue but their application was rejected.

The company had fend off 16 others to win the tender. KAA was to recover the cost of operating the buses from the 48 airlines that operate out of JKIA.

For the eight years, Relief & Mission Logistics was to earn Sh1 billion in fees.

After they won the tender, the company imported seven buses that were in operation until their contract was terminated months later, following President Kenyatta's visit.

Directors at Relief & Mission Logistics stated that they invested Ksh245 million in the deal, and are yet to receive a penny.

The company stated that it acquired the buses for Ksh200 million and paid Ksh45 million in taxes to the Kenya Revenue Authority (KRA).

In his ruling, Gichuhi stated that KAA had failed to prove that the contract was terminated to fore-stall the lose of public funds.

He determined that the contract was compliant to all the provisions of the Public Procurement and Assets Disposal Act.

“I find and hold that the tender process was lawfully carried and was not contrary to the Constitution with regard to the utilisation of public funds,” he said.