Mbadi Begins Crackdown on Rogue Procurement Officers
- EACC advises City Hall to terminate Kshs. 313 million street lighting contract over fraud
- DPP instructs Sakaja to rein in procurement officers over fraudulent tender deal.
Procurement and supply chain management systems at the national and county government levels have increasingly become conduits for multi-billion shilling fraudulent deals crafted by public and state officers, unabated.
However, there could be light at the end of the tunnel, after the new National Treasury Cabinet Secretary John Mbadi vowed to ensure that “end – to – end procurement” works successfully.
Upon taking charge at the Treasury Building on Monday, 12 August, 2024 Mr Mbadi made a firm commitment to streamline procurement in the public sector.
Unscrupulous entrepreneurs drain county governments coffers each financial year, through dubious tenders that favour particular individuals or companies. But Treasury CS now says this must stop.
“Procurement and supply chain management is an area where we don’t have option. We must prudently use public resources by making the procurement system efficient and not open or prone to abuse”, Mr Mbadi told a battery reporters at his Treasury Building office.
Since the inception of county governments, governors and procurement officers clandestinely adulterate the Public Procurement and Disposal Act, by meddling in the tender processes in order to deep their hands in public coffers through their cronies.
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Thus, county governments have become prone to fraudulent procurement processes, through which governors, senior county officials and friendly entrepreneurs siphon millions of devolved funds disbursed by the National Treasury and own source revenue meant for development of public infrastructure and social amenities in the respective counties, due to bad governance.
In Nairobi, the county government and its multi-billion shilling subsidiary water company are deeply engulfed in enormous financial impropriety that has grossly affected development in the Wards, leading to inefficient service delivery and perpetual delay of staff salaries.
As a result, Kenya County Government Worker’s Union has issued a notice to the County Executive Committee Member for Finance and Economic Planning, Charles Kerich threatening industrial action.
Through a letter to the CECM, dated 13th August, 2024 by the Union’s Nairobi Staff Branch Secretary, Festus Ngari and the City Branch Secretary, Calvince Okello, the county employees will parade and picket at City Hall to demand their dues, if salaries are not paid by 3rd every month.
According to the county government worker’s Union, City Hall had not paid July 2024 staff salaries by 13th August, 2024.
“Our members have been subjected to a most awkward and embarrassing season of their life in the service. They cannot meet their financial obligations, which are not limited to commuting to work, feeding their families, prepaying loans and other accruing bills”, Mr Ngari says.
The Treasury CS has warned beneficiaries of tailor-made procurement processes in the national and county governments to pack up and exit the scene.
“If there are people who have been benefiting from the chaotic procurement system, you have benefitted enough. Now allow Kenyans to get value for public money”, said the Treasury Cabinet Secretary in a terse statement.
“We must make sure as Treasury, that the end-to-end procurement works and it succeeds”, Mr Mbadi noted.
In its report that was published over a week ago, the Ethics and Anti Corruption Commission has also issued an advisory to Nairobi City County Government to strictly adhere to procurement procedures.
The advisory follows recommendations by the Director of Public Prosecutions (DPP) to governor Johnson Sakaja, to take action against the county tender committee officials, over irregularities in a Kshs. 313 million tender for supply and delivery of electrical materials for street lighting.
The EACC has subsequently advised City Hall to terminate the Kshs. 313, 844, 035.00 street lighting contract over fraud.
In a scathing statement on his X account (formerly Twitter), on Tuesday, 13 August, 2024, the Member of County Assembly (MCA) for Kileleshwa Ward in Nairobi, Mr Robert Alai openly criticized the county executive and legislature for what he termed as prevailing bad governance.
The county legislator has publicly appealed to President William Ruto and ODM party leader Raila Odinga, the two architects of a recently constituted broad-based national government, to rein in the leadership at City Hall and salvage the capital city from lacklustre service delivery.
“Hello @RailaOdinga @WilliamsRuto, the current leadership of Nairobi County Assembly and the Executive are destroying Nairobi. Don’t allow this to go on. Please stop this mess before its late”, the county legislator posted on his his X platform.
Nairobi City Water and Sewerage Company (NCWSC), a multi-billion subsidiary of the county government, is reportedly facing serious challenges in its procurement and supply chain management system due to claims of interference by governor Sakaja’s top aides.
The company’s management has allegedly been infiltrated by the governor’s Chief of Staff, Mr David Njoroge and Mr Osman Khalif, Sakaja’s Liaison Officer and Personal Assistant.
Insiders told The Times the two were calling shots at the water company headquarters on Kampala Road, Industrial Area, after they allegedly instigated the transfer of a substantive procurement manager for refusing grant favours to specific companies in which they had interest.
Prior to the transfer, the procurement manager had been sacked when he declined instructions to award tenders irregularly. However, he successfully sought legal redress and was reinstated by court.
However he could not last in the position after he allegedly declined to heed to further instructions to award specific tenders to the governor’s cronies.
The governor’s aides are now said to be directing operations in the water company’s procurement department by influencing how tenders should be awarded.
The company’s Managing Director, Eng Nahason Muguna is reportedly under siege but he is compelled to play ball in return for favour from the governor.
Apparently, Eng Muguna is under obligation to implement the governor’s instructions through his aides because he is said to be seeking extension of his term, which is coming to an end in a few months.
Cumulative Auditor General’s reports and a Nairobi City County Assembly ad-hoc committee report seen by The Times, but is yet to be tabled in the House, indicates how revenue running in millions of shillings is mismanaged by the county officials.
The Auditor General and the Ethics and Anti Corruption Commission (EACC) have perpetually raised red flags on rampant fiduciary malpractices at City Hall and the water company, with procurement topping the list.
Over a week ago, the EACC released its latest quarterly report on investigations between 1st April – 30th June, 2024 in line with the requirements under Section 36 of the Anti-Corruption and Economic Crimes Act, 2003.
The Report, published in the Kenya Gazette on Friday, 9th August, 2024 cites completed investigations, the files forwarded to the Director of Public Prosecutions and decisions made by the DPP on each of the files that were submitted by the EACC.
On Nairobi county, the DPP has told governor Sakaja to take action against the chief officer works and mobility, head of procurement, procurement officer (secretary of tender opening/evaluation committee), finance officer, procurement Officer, chair – tender opening committee, chair – tender committee, member (technical evaluation committee) and the chair tender opening committee.
Governor Sakaja is required to take action against the officers in lieu of prosecution, for their acts of commission or omission on the fraudulent street lighting tender, following investigations by the EACC.
The county officers were found culpable of irregular procurement of goods by the county government in a tender No. NCC/MWKRS/T/109/2022-2023 for supply and delivery of electrical materials for street lighting.
According to the EACC report, the county procurement department issued eight local purchase orders (LPOs) to eight different companies amounting to Kshs. 313, 844, 035.00 in the financial year 2022-2023.
The LPOs were signed before the accounting officer approved recommendations set out in the professional opinion, which violates the procurement law and procedures, says the anti corruption agency.
The Commission further established that the LPOs were signed and issued to the suppliers without a preceding acceptance of awards, in violation of the public procurement laws.
Investigations revealed that letters of notification of intention to enter into a contract were written on 6th February, 2023 and LPOs signed on the same day, a clear violation of the 14 day awaiting period, which must lapse following notification of award before contracts are signed.
The report names Waylon Gen. Ltd, Fidelity Telecoms Services, their directors and the county officials for conspiracy to commit corruption, neglect of official duty, failure to comply with procurement law, corrupt practices in a procurement process, uttering false documents, forgery and financial misconduct.
The EACC has also recommended for the cancellation of the signed contracts LPOs
In the water company, procurement is now characterized by unethical practice in contravention of the Public Procurement and Disposal Act due to interference, which saw a procurement manager transferred to another department.
The transfer is said to be in contravention of the water company policy regulation, which provides that professionals are supposed to head all sectors in the water company.
Even though, the new procurement manager is reportedly under duress to accede to “instructions from above” working atmosphere.
Impeccable sources at City Hall intimated that firm instructions had been issued to the new manager through the MD, to heed to directives from the governor’s point men on all new tenders.
Accordingly, the instructions require that all tenders valued at five million shillings and above are allegedly supposed to be awarded to the governor’s cronies.
The governor is accused of meddling is the affairs of the water company through his two officials in a script similar to one he has applied at City Hall on service delivery that is now biting the city residents and Members of the County Assembly (MCAs).
About a week ago, Eng Muguna attended a meeting at Sakaja’s Riverside Drive private office aka Shakahola, where he is reported to have received firm instructions before the governor’s two aides to comply accordingly.
Besides Shakahola, close allies of the governor claim he had acquired another office on Mombasa road, exclusively for his private operations because the Riverside one was now known to all an sundry.
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