Nairobi News

HustleWhat's Hot

Firm in airport buses saga spent Sh300 million

The company that was contracted to provide passenger transfer services at the Jomo Kenyatta International Airport has spent close to Sh300 million so far, a parliamentary committee was told.

Relief and Mission Logistics Ltd told the Transport Committee Sh250 million was invested in apron buses and Sh45 million was paid to the Kenya Revenue Authority as advance tax for the services already rendered.

The owner of the company, Mr John Gitonga Kihoro, told the committee chaired by Starehe MP Maina Kamanda that it participated in an open tender. He said the firm was exempted from paying excise duty after following the law.

Mr George Thairu, the company’s operations manager, spoke about the investments made in the contract that has since been terminated by the Kenya Airports Authority.


“We have told you the truth. Please consider that the people sitting in front of you invested more than Sh250 million. We paid more than Sh45 million tax,” said Mr Thairu.

Some committee members had questioned the veracity of the breakdown of costs presented at the meeting in Continental House, Nairobi.

The company has threatened to sue the Kenya Airports Authority (KAA) after the premature termination of the contract.

The cost of the buses was also questioned because when the committee quizzed Kenya Airways Chief Executive Officer Mbuvi Ngunze, it was told the national carrier’s buses cost Sh22 million.

From the documents provided by the taxman, one of the buses was manufactured in 2011 and the other four in 2014. The MPs had presumed this to mean that the bus made in 2011 was not new.

But Mr Thairu argued that even in a dealer’s showroom today, a vehicle would be considered new if it were assembled in 2013 or 2014, as long as it has not been used.


He said the firm bought the bus made in 2011 because it was under pressure from the airports authority to get down to work.

Mr Kihoro said the cost of the buses was based on an average of the total cost of bringing them to the airport from Cobus Industries in Germany.

He said shipping each bus cost 20,000 euros. Mr Kihoro said the total cost included Value Added Tax, insurance, port charges, Railway Development Levy, Import Declaration Fees and other transportation costs.

“While the figure may look high, it is justified by the documents we have provided,” he added.

Mr Kihoro was also taken to task for applying for waiver of the duty on the buses. Mr Christopher Omulele (Luanda, ODM) argued that the airports authority was the only agency allowed to apply for the waiver.

SOURCE: Daily Nation