A bus company that procured passenger buses for use at the airport is set to receive up to Sh. 934 million in compensation after President Uhuru Kenyatta made an order terminating its contract. The company, Relief and Mission Logistics, has presented the Kenya Airports Authority with the bill after winning an arbitration award for concession fees and damages after the KAA terminated its eight-year contract in 2015.
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According to a report that appeared in a local daily, Relief and Mission Logistics had only operated for seven months when President Kenyatta issued a directive for the cancellation. Uhuru made the order after questioning how the company was getting paid Sh. 13.81 million per month to run five buses.
“While terminating the contract, the State agency said the cancellation was of necessity, convenience, and in the public interest, prompting a legal dispute. Directors of Relief and Mission Logistics told a parliamentary inquiry that they had not received a penny despite investing Sh. 300 million in the project. The company said it spent Sh. 250 million to buy the five apron buses and paid Sh. 45 million in taxes to the Kenya Revenue Authority. For eight years, Relief & Mission Logistics was to earn Sh. 1 billion in fees,” a report that appeared in the Business Daily said.
Allen Gichuhi who was the arbitrator in the matter ruled in favour of the firm over what he termed as failure by the KAA to show how public interest prompted the cancellation of the bus deal.
“The arbitrator awarded the company $74,400 (Sh. 8.1 million), $72,000 (Sh. 7.8 million) and $284,800 (Sh. 31 million) as well as interest thereon at three percent per year until payment is made in full for December 2014, January 2015 and May 2015 respectively,” the report said.
It added that Relief and Mission Logistics also won $4,309,474 (Sh. 469.7 million) being loss of earnings and profits in the event of a rise in the number of buses performing the concession agreement to seven for the eight-year term together with interest at the prevailing commercial rates until payment in full, in the alternative.
“The arbitrator also awarded the apron buses firm $3,830,550 (Sh. 417.5 million) being a loss of earnings and profits in the event the number of buses performing the concession agreement remained at five over the eight-year term together with interest at the prevailing commercial rates until payment is paid in full,” the report said.