Kenya Wildlife Service lost Sh 42 million compensation for the time the agency’s Bell Helicopter was grounded following an accident at Nairobi’s Wilson Aiport, MPs heard last week.
National Assembly’s Public Investment Committee chaired by Mvita MP Abdulswamad Nassir heard the millions were lost in what the Service described as weak contracting terms with oil marketer, Kenya Shell.
Auditor General Edward Ouko had red-flagged the anomaly after it emerged that KWS only negotiated for the Sh 13.7 million from the oil marketer dropping Sh 42.2 million compensation for the 90 days the aircraft was being repaired.
The accident occurred on July 16, 2012, while the helicopter was refueling at Nairobi's Wilson Airport.
The KWS initially sought Sh13.7 million for repairs and Sh42.6 million for loss of use of the helicopter for the period it was grounded.
The demand prompted a suit that saw the KWS accept the compensation for repairs and dropped its claim for loss of the chopper's use through an out-of-court settlement.
“No justification has been provided why the Service agreed and received compensation of Sh. 13, 739,825 for damages and forfeited Sh 42,688,000 for loss of use of aircraft, the time during which the helicopter was under repair,” Ouko pointed in his audit report.
But appearing before PIC on Thursday, KWS Director General John Waweru blamed the loss on poor crafting of the contract document between the Service and the oil marketer.
He said whereas the compensation for damages was captured in the contract, there was no mention for the loss of time when such repairs are being undertaken.
“It is true KWS Bell Helicopter got an accident involving Kenya Shell fuel tanker while refueling. The Service made a claim for repairs which was settled by the company as observed as auditors,” Waweru said.
“The loss of use Sh 42,688,000 wasn’t settled due to challenge on contractual documentation to third parties usage of Aircraft to support KWS revenue loss claim and also the insurance cover did not contain a clause on economic loss.”
He was appearing before the Investment Committee to responds to the Service’s spending from financial years 2012/13 to 2017/18.
