Oil marketers retain international forensic auditors to probe KPC fuel losses

Kenya Pipeline Company (KPC) says oil marketing companies are undertaking a forensic audit following  reports of  huge fuel losses in its system.

In a statement, Acting Managing Director Hudson Andambi said the audit, which is being conducted by international forensic auditors will last seven weeks.

“In order to address Kenyans’ concerns about fuel losses within the KPC system, which losses eventually translate into higher consumer prices, the KPC Board of Directors have invited our customers, the Oil Marketing Companies (OMCs), who are the owners of the fuel products that KPC transports, to conduct a forensic audit. This forensic audit commence on Monday 18th February 2019 and is being conducted by renowned international forensic auditors appointed by the OMCs. It is scheduled to last 7 weeks,” said Andambi.

KPC last year reported that 11.6 million litres of fuel had been lost through leakages and vandalism on the pipeline over a two-year period. The petroleum products lost would translate to Sh1.2 billion at the average cost of fuel at Ksh 100 a litre.

“We are also undertaking a thorough review of our procurement, processes, in the full knowledge that the bulk of corruption allegations in KPC involve procurement. This exercise is already underway,” he added.

Andambi also said KPC has closed insurance cover lapses identified early this year on February 2. Recent media reports indicated that Africa Merchant Assurance Company (Amaco), which is associated with Deputy President William Ruto, secured  30% of the insurance cover for fuel losses despite not participating in the bidding process. CIC, on the other hand got 70% as the lead underwriter. AIG Kenya Insurance Company Ltd holds the Public Liability Policy.

The Directorate of Criminal Investigations is investigating the matter and has already grilled, among other KPC chairman John Ngumi.

Former MD Joe Sang has also been charged in court over alleged fraudulent tendering and questionable payments totaling to over Ksh 2 billion.

Andambi said KPC is taking the steps internally even as investigative agencies look into several other allegations to determine their veracity and thereafter set out their next courses of action so as to immediately stop any malpractices and in the longer term embed strong controls and processes to ensure they do not have repeat incidents.

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He said the recent media reports were based on the Auditor General’s report for the year ending June 31, 2018, adding they were ready to be accountable whenever called upon by the National Assembly’s Public Investments Committee.