A Sh1.2bn dispute pits Wilfak Engineering against KPA, with ex-AG Justin Muturi’s cost variation advice now at the center of the escalating legal battle.
KPA Faces Fallout From Ex-AG’s Advisory
A legal opinion by former Attorney-General Justin Muturi is now central to a Sh1.2 billion tender row between the Kenya Ports Authority (KPA) and Wilfak Engineering Ltd over asbestos roof removal works.
In a letter dated July 13, 2023, Muturi endorsed a proposal by the contractor to vary prices in line with inflation and rising input costs. He cited Section 139 of the Public Procurement and Asset Disposal Act, which permits price revisions based on data from the Central Bank of Kenya or Kenya National Bureau of Statistics.
Contractor Seeks Protection from Inflation
Wilfak Engineering claims KPA’s refusal to adjust contract pricing makes it economically impossible to execute the works. According to the contractor, key construction costs have surged since the tender was awarded, a reality that public law recognizes under specific circumstances.
The company argues that Muturi’s advisory should have provided the legal cover to greenlight the variation, but KPA has declined to act, citing budgetary constraints and accountability concerns.
KPA Resists Variation, Cites Breach
KPA has taken a firm position, arguing the contractor breached the agreement by failing to commence work on site. The parastatal says no additional funding was committed beyond the initial Sh1.2 billion ceiling, and insists performance cannot hinge on a disputed advisory.
Internal documents show KPA feared that opening the door to post-award cost hikes would trigger a domino effect on other tenders, potentially exposing the state agency to financial risk and audit questions.
Appeal Court Now Holds the Cards
The dispute has escalated to the Court of Appeal in Nairobi, where both parties await a ruling that could set precedent for future public procurement deals under inflationary pressure.
The case throws the spotlight on the role of the Attorney-General’s office in procurement matters—and the legal weight its advisory opinions carry when public institutions opt to ignore them.
Public Procurement Under Pressure
As Kenya’s inflationary cycle drags on, contractors continue to push for repricing leeway in state tenders, arguing that stagnant contracts under old pricing risk insolvency. At stake are billions in stalled projects and the interpretation of legal advisories in fast-moving economic contexts.
Whether Muturi’s opinion was binding—or simply advisory—will now be tested in court. But for Wilfak and KPA, the Sh1.2 billion question is who pays for the shifting economic ground.