What pain do you think any Kenyan feels when it is announced that huge sum of money have been siphoned or lost through fake government deals? It is unpronounceable bearing in mind the weight of the burden already they are carrying.
Ministries, agencies and State corporations uncontrolled appetite for mega projects continue to expose taxpayers to losses through badly thought contracts even as questions abound on the viability of such plans.
And as new projects continue to be rolled out in various sectors across the country, it appears that those who win government tenders are almost guaranteed of billions of shillings from the weak, disorganized and inefficient State processes that most of the time fail to stick to the contract.
Kenya’s landscape is dotted with projects whose delivery was delayed or even shoddily done. Yet, some contractors still keep winning tenders, walking away with money for work not done.
Delayed implementation of such projects yet contracts have been signed, points to a State machinery that lacks a solid team to plan before putting pen to paper, according to a public policy and economic analyst Robert Shaw.
“Government does not have a strong legal team specializing in supporting the tendering process. Companies are more skilled than government and capitalize on non-watertight tenders to their advantage,” says Mr Shaw.
Barely two weeks ago, Petroleum and Mining Cabinet Secretary John Munyes told Parliament that the government will have to pay a Chinese firm Sh2 billion following the change of mind on which company should undertake the much-awaited mineral mapping survey.
“At the time Geti was put on hold, we already had a running contract with them. A contract is binding and, therefore, we have to pay at the end of the day,” said Mr Munyes.
This captures a glimpse of losses that taxpayers are going to bear after the government froze the deal with Geological Exploration Technology Institute (Geti) opting for the survey to be done by local geologists and the National Intelligence Service.
Another Chinese contractor, Anhui Construction Engineering Group Ltd in a joint venture with China Aero-Technology International Engineering Corporation, was paid Sh4.3 billion yet no work had been done on the cancelled Greenfield Terminal at Jomo Kenyatta International Airport.
This was in the hands of Kenya Airports Authority (KAA). The payment was in addition to Sh413.5 million paid to consultants and law firms. The project was to be implemented on design-and-build but was terminated on grounds that the contract was void from the beginning.
The National Social Security Fund (NSSF), another State entity, risks costing taxpayers Sh6.9 billion if Chinese contractor, China Jiangxi International, is granted its prayers to be compensated the sum due to the stalled construction of Nairobi’s Hazina Trade Centre. The claim is above the original contract price of Sh6.7 billion.
Apart from proposing a framework to guide funding of projects, Treasury’s Rotich now wants State contracts to be subjected to tight checks before a final decision is made to sign them, especially when external financing is involved.
“Kindly note that the check-list of mandatory requirements are critical in mitigating the government against any potential financial risks of paying commitment fees and other charges on loan amounts due to delays in commencement of project implantation,” Mr Rotich says in the memo.