WHITE ELEPHANTIVRCL’s collapse has been revealed in a suit filed by the NIB against KCB, where the government institution is seeking to recover Sh1.1 billion in guarantees IVRCL obtained in 2013 before starting works on the Bura Irrigation Scheme project. IVRCL has been renewing the bank guarantees every year since. By law, a company undergoing bankruptcy proceedings cannot obtain bank guarantees, but IVRCL somehow managed to obtain the insurance as recently as last year. IVRCL’s lenders, India-based Canara Bank, asked KCB to issue a guarantee to the contractor on its behalf. The state firm adds that it does not need to give KCB any reasons when cashing the guarantee under the contract they signed.

Source: Daily Nation December 24, 2019 06:56 UTC