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{
    "id": 734375,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/734375/?format=api",
    "text_counter": 162,
    "type": "speech",
    "speaker_name": "Hon. Wamunyinyi",
    "speaker_title": "",
    "speaker": {
        "id": 291,
        "legal_name": "Athanas Misiko Wafula Wamunyinyi",
        "slug": "athanas-wamunyinyi"
    },
    "content": "Operation of airport lounges is part of KAA’s core business. Therefore, these have been restored and they paved way for KAA to engage in procurement processes of new duty free master concessionaires. I have given some detailed background from when the WDF shops were established at our airports, the kinds of agreements that were entered into that heavily favoured them and the companies we dealt with that were registered at the Isle of Man by foreigners showing how the locals were not involved. Obviously, we know how locals could have been involved in this. Having given this background following our deliberations, the Committee made the following findings and observations: 1. The International Centre for Settlement of Investment Disputes based in Washington, DC, found the lease agreement entered into between the Kenya Government and the WDF in 1989 to be shrouded in bribery allegations and, therefore, had no force of law, hence was declared null and void. 2. The KAA management purposefully designed and signed a flawed contract document with contentious clauses and it took the intervention of the CS, Ministry of Transport, to force a revision of clauses, which has led to the signing of the new agreement. The subsequent action taken by the management of amending the agreement has addressed the clauses which were in dispute or in question. 3. If the financial proposals for the tender KAA/193/2013-2014 were evaluated independently from the technical proposals, then KAA would have earned minimum yearly guaranteed concession fees of US$626,000, approximately Kshs63.8 million. You can appreciate the kind of money we are talking about. If it was today, we would be talking of billions of shillings. Indeed, that is the price difference between the highest yearly guaranteed concession bid of US$4.1 million, that is approximately Kshs420 million per year, and the yearly guaranteed concession bid price of US$3.5million per year by the Duty Free International AG, which was awarded the contract. 4. The Tender Evaluation Committee erred in considering a mandatory requirement, a minor deviation contrary to Section 64(1) of the Public Procurement and Disposal Act 2005, which states that a tender is responsive if it conforms to all the mandatory requirements in the tender documents. 5. The Committee observed that the KAA has never bothered to make provisions for the contingent liabilities of Kshs10.5 billion arising from the arbitral and High Court awards and professional legal fees arising, raising doubts as to the accuracy of its audited financial statements and putting KAA assets at risk of auction should the claims be affected. 6. The KAA and World Duty Free Shops have not filed consent in courts to set aside the arbitral awards made by the Hon. Justice Retired Toqbo. This obviously exposes the KAA and the tax payers’ funds to a contingent liability of close to US$ 49 million, approximately Kshs5 billion without interest. 7. The Committee observed that the sole intention of the World Duty Free Shops was to perpetually retain all the spaces at the airport, at the duty free area at the Jomo Kenyatta and Moi international airports, either in the name of World Duty Free or through other associated companies with different names. They had many names. The Committee further observed that Eng. Michael Kamau, the former Cabinet Secretary (CS) in the Ministry of Transport and Infrastructure, on the 16th September 2013, held a highly publicised press conference jointly with the World Duty Free Shops officials categorically The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
}