The Kenya Pipeline Company (KPC) has been dragged to court in a Ksh 10.87 billion dispute over the construction of a key national infrastructure project.

🇰🇪 Breaking It Down

In an announcement issued on Monday, June 15, KPC confirmed that it is facing a lawsuit filed at the High Court in Milimani by an international company that is seeking billions in damages.

According to the statement, the dispute arises from the procurement, construction, testing and commissioning contract for the line 1 replacement project, a critical infrastructure upgrade for Kenya's fuel pipeline network.

"The suit relates to the contract for Procurement, Construction, Testing and Commissioning of Line 1 Replacement Project (the "Contract"). ZIC alleges that KPC has failed to pay them USD 19,036,187.46 (Ksh2.4 billion) being extension of time claims and USD 65,081,253.70 (Ksh8.4 billion) being interest on delayed payments, pursuant to the terms of the Contract. They are therefore seeking to recover a total of USD 84,117,441.16 (Ksh10.87 billion) from the Company," the statement read in part.

📌 What You Need to Know

According to the lawsuit filed, the construction company alleges that KPC failed to settle contractual obligations amounting to Ksh2.4 billion (USD 19.04 million) in extension of time claims.

The contractor further claims Ksh8.4 billion (USD 65.08 million) in interest on delayed payments, bringing the total claim to Ksh10.87 billion ( USD 84.12 million).

The company is therefore seeking full compensation for the alleged breach, arguing that the payment delays have significantly impacted project costs and timelines.

However, KPC has dismissed the claims, stating that it has credible legal and factual grounds to contest the suit. The company said it has already instructed its legal team to mount a full defence and safeguard the interests of shareholders and stakeholders.

"The Board, based on preliminary legal advice, is of the view that the company has credible legal and factual grounds upon which to contest the claim," KPC said in its statement.

According to KPC, the case does not affect its operations, focus, or financial position.

📰 Source: Kenyans.co.ke