How Kenya’s smart and powerful cartels loot billions of public funds

Image result for government dealings kenyaCartels working with top officials in various Government ministries are looting billions of public funds through irregular procurement processes.

Well-connected cartels in private and public sectors sometimes operate from secluded high-end hotels where they cut deals, get a preview of confidential contract details and decide who gets what contract and at what amount.
During such meetings, rogue procurement chiefs from Government ministries and State corporations are roped in to agree on the cuts, kickbacks and percentage of benefit once deals are sealed.
This is the preliminary groundwork to influence award of the contracts. It is such connivance that has seen briefcase operators without proof of competency to deliver bag lucrative tenders.
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Thereafter they sell the bid to established firms at a prime fee, with the loot shared out among the players in the chain.
One such company has opted to negotiate with Ethics and Anti-Corruption Commission for an out-of-court settlement over a Sh800 million tender it won when it had no capacity to supply the commodities.
Not only was the cost of the equipment inflated from Sh308 million to Sh800 million, but the company also sub-contracted the tender to a Chinese firm at a cost of Sh525 million, leaving the broker with Sh275 million for just being a go-between.
Recent rulings
A review of recent rulings nullifying dozens of tenders worth Sh500 billion offers a glimpse into how the looting is facilitated by powerful figures in the firms giving out tenders.

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Among the tricks used to fleece billions of public funds is inflation of contract sums, tampering with tender documents, using unauthorised junior officers to conceal their identities, and tenders being tailor-made to suit their specifications.
In some instances, one individual registers up to 10 companies and applies for the same tender using different names.
Through collusion with the procurement entities, the same person will get the benefit using a different entity.
Several decisions from the courts and the Public Procurement Administrative Review Board (PPARB) have exposed the corrupt moves which have not spared even women and youths who had some of the 30 per cent Government tenders set aside for them being grabbed.Image result for fraudulent deals
In the past six months, close to 30 Government tenders estimated to be worth Sh500 billion have been cancelled by courts and PPARB over irregularities, fraud, abuse of process, inflation of prices and disregard to procurement rules.

“There is no prudent use of public funds when it comes to Government procurement. It is either the officers wilfully decide to abuse the procurement process or collude with cartels to decide who will get what from which ministry,” said PPARB, which is chaired by lawyer Paul Gicheru, in one of the rulings.

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