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"id": 196306,
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"speaker_name": "Mr. Ethuro",
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"legal_name": "Ekwee David Ethuro",
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"content": "Mr. Deputy Speaker, Sir, there is a third contract which was awarded to Put Sarajevo Engineering Contractors in October 2001 at a contract sum of Kshs896 million. The Ministry had to pay the contracting services to Otieno Odongo who was contracted to supervise the project. The firm was paid a total of Kshs26,402,000. With four contracts, what was the contractor supervising? From Kshs146 million to almost Kshs986 million which is almost a billion, in a period of ten years, the road was not done but the money was paid! \"The Committee is gravely concerned that the project was poorly designed and executed. Hence, the road which was to cost the taxpayer Kshs146 million had, by November 2004, cost Ksh1.8 billion, yet it was still incomplete. Repeated appointments and termination of contracts delayed the completion of the road and led to loss of colossal sums of public funds\". We believe that this was deliberate in order to syphon off taxpayers' money. \"The Committee, therefore, recommends that the Kenya Anti-Corruption Commission (KACC) investigates this project, from inception to completion, with a view to establishing whether the Government got value for money and prosecute, in our view, any persons who were involved in the embezzlement of public funds\". The third conclusion that the Committee would like to highlight is the allocation of Government plots and houses to Government officers and firms. \"The Committee noted with grave concern that Government plots and houses were allocated to private firms and individuals through direct grants upon approval by the Head of State pursuant to powers conferred upon the President by Section 3 of the Government Lands Act, Cap.280, Laws of Kenya\". We do not dispute that. However, in some instances where the allocations were done by the Commissioner of Lands or the Head of Public Service, these are not provided for. By 30th June, 560 PARLIAMENTARY DEBATES April 22, 2008 2001, the number of plots allocated by the Commissioner of Lands or the Head of Public Service came to a total of 618 of which 320 plots were in Nairobi, 67 in Coast Province, 39 in Central Province, nine in Eastern Province, two in North Eastern and three in Western Province. \"The Committee further noted that the Presidential Commission of Inquiry on Illegal/Irregular Allocation Public Land, famously known as \"The Ndung'u Land Report\" investigated the matter and it was expected that as soon as the Report was adopted and released, the relevant Ministry of Lands would be able to implement its recommendations\". We are still awaiting its implementation. \"The Committee, therefore, expresses great concern that the Presidential Commission of Inquiry on the Illegal Allocation of Public Land, \"Ndung'u Land Report\" had concluded its work. However, its recommendations are yet to be implemented\". Further, \"The Committee observed that most of the plots and houses which were allocated were public utilities and, therefore, the allocations remain irregular and must revert to the original intended use of public utilities. It is, therefore, a considered recommendation by the Committee that the Government should implement the recommendations of the Commission of Inquiry into the Irregular and Illegal Allocation of Public Land\". Mr. Deputy Speaker, Sir, at this juncture, I would like to congratulate the new Minister for Lands. When he was taking office, he made it very clear that even the President, by law, when he wants to allocate public land, he should commit it in writing. I really hope that Mr. Orengo will continue with that spirit until the time he leaves that Ministry. I hope it is not just time for making promises because new kids are on the block. We hope the promises will be sustained. \"The Committee noted with concern that Camp Globe Limited of the United Kingdom was identified by the Office of the President and approved by the Treasury to deliver a security printing press valued at another Kshs430 million. The procurement was done in 1993 through single-sourcing since this was a security item\". The Committee was really concerned about the single-sourcing on issues to do with security matters. The Committee also noted that the Treasury purchased 300 vehicles for the Office of the President at a cost of Kshs278 million. But the Ministry had no details on how the supply of the vehicles was identified, the type and number of vehicles supplied and where the vehicles went. Mr. Deputy Speaker, Sir, the Committee noted that the Treasury factored into the budget of the Office of the President for the year 2000/2001, the provision for the payment of an amount of Kshs708 million for 300 vehicles which were to be bought at a cost of Kshs278 million, which is almost Kshs300 million. Now they were going for over Kshs700 million. This was more than twice the original cost used in the purchase of the said vehicles and printing press. The Committee, therefore, expresses its displeasure that the funds for the purchase of the 300 vehicles' was factored into the Budget without clear documentary evidence of the vehicles' physical presence. The Committee was further concerned by the irregular manner in which the supplier of the vehicles was identified. It was not possible, therefore, to determine whether the vehicles were ever delivered since their whereabouts was not known. The vehicles and the money were lost. The Committee, therefore, strongly recommends that the Accounting Officer should liaise with the Permanent Secretary, Treasury, and identify the officers responsible for these actions, in both the Treasury and the Office of the President, who are responsible for the irregular handling of the Kshs700 million, with a view to ensuring that they face the full force of the law for all their sins of omission and commission. April 22, 2008 PARLIAMENTARY DEBATES 561 The Committee further recommends, without hesitation, that the Director of the Kenya Anti-Corruption Commission (KACC) should move with speed and investigate the entire procurement of goods and services, which cost the Government the Kshs708 million. They should be able to prosecute any persons who fail to adhere to the laid down procurement rules and regulations. Mr. Deputy Speaker, Sir, I am sorry that hon. Members are reading about monies just disappearing. That is, however, the reality of the Kenyan public. We have no choice but to give it to you, because we also receive it on your behalf. Mr. Deputy Speaker, Sir, there is an issue that we found important to highlight at this particular stage. That is compensation and payment of ex-gratia. The Committee noted that there was a delay in settlement of payment arising from suits against the Government. This is an issue that the Committee, for the all the years I remember, has been grappling with. I hope that this time round, the Grand Coalition should be able to bring it to termination. Mr. Deputy Speaker, Sir, the Committee was informed that delay by Ministries in settling claims after judgement by courts was caused by none other than the Attorney-General of the Republic of Kenya. The Attorney-General's failure to communicate court awards to the Ministries in time, the Treasury's sluggishness in granting authority to settle awards and the lack of the necessary budgetary provisions, because the expenditure is unpredictable, are some of the real culprits that make the Government lose a lot of money. In some cases, it was just abdication of responsibility by none other than a Minister of the Government appointed for the sole purpose, in the person of the Attorney-General, to represent the Government. I will give examples. The Committee was informed that the Attorney-General was duly notified by the Office of the President about a contractor, one Highway Furniture Mart, who was awarded a contract to build the Kirinyaga District Headquarters, of his intention to sue the Ministry over a disputed claim of Kshs11,257,111 plus interest at 36 per cent. The Ministry notified the Attorney-General; however, the Ministry lost the case. It protested to the Attorney- General - we have copies of the letter Ref.No.OP201209/008/CE/83/51 of 21st, March, 2000 - that he should institute an appeal. This was done but it was unsuccessful. Mr. Deputy Speaker, Sir, the Attorney-General instructed the KACC to investigate the State Counsel, one by the name V.V. Prasad, due to his conduct in the case and other matters. However, the officer went back to his country of origin. The Government was, therefore, left with no choice but to pay the sum of Kshs48,774,267.40, which comprised the initial amount and the accrued interest. You will realise that the initial amount was only Kshs11 million. Mr. Deputy Speaker, Sir, another example of the negligence on the part of the Attorney- General is that the Committee was informed that a contractor who rehabilitated roads in Mandera and Wajir Districts was claiming payment of Kshs12,632,100 and a sum of Kshs14,400,000, being the value of performance bonds plus damages for breach of contract and interest. Although the Ministry disputed the claim, the hearing of the contested issues was set for 6th October, 1999. However, the State Counsel did not appear in court. The case was subsequently heard ex-parte and ruling given in favour of the plaintiff- of course, what do you expect - on the 23rd November, 1999. The Committee was appalled and disgusted by the manner in which the Government lost huge sums of money as a result of improper representation in court by officers from the Attorney-General's Office. I am sure he is still smiling! The Committee, therefore, recommends that the Head of Public Service and Secretary to the Cabinet should reconsider the existing policy in order to effectively and efficiently address court representation, and Government defence in court to avoid unnecessary losses of public funds. In fact, many Ministries would rather have officers from the Attorney-General attached to them even if they share them, so that the line Ministries know that if there is any litigation, they have their own officer whom the Permanent Secretary (PS) can instruct to represent him in court. The courts are blackmailing PSs. Sometimes when they fail to go to court, the court issue court 562 PARLIAMENTARY DEBATES April 22, 2008 summons for them to be arrested. Then, everybody is in panic and would like to pay immediately. The Committee further recommends that the Director of the KACC should investigate all these cases, which have been lost due to failure, or inadequate representation, or incompetent representation in courts by the Office of the Attorney-General, with a view to prosecuting the officers who occasioned loss of public funds. In the course of taking evidence, the Committee noted with regret that these officers from the Office of the Attorney-General have yet to win a single case for their client. I actually suspect that they lost in all cases; it is only that I do not have the entire history from 1963. The Government has never won a single case. This is not because Ministries were not furnishing the Attorney- General with the relevant information. It was because the Office of the Attorney-General was either incompetent or unwilling or unable to perform, or all of the above. Mr. Deputy Speaker, Sir, the Committee is yet to be furnished with a single case where a Government Ministry won a case against it. Due to the foregoing, therefore, the Committee recommends that Government representation in court be decentralised from the Office of the Attorney-General. Every Ministry should have a legal division with experts, who can effectively and efficiently represent it in court in order to avoid payment of colossal sums of money arising from judgements against Government and accrued interests. Mr. Deputy Speaker, Sir, the sixth example is on the National Population and Housing Census on pages 32 to 36 of the 2000/2001 Report. This is extremely topical given that it is just another one year to go to conduct another National Census. You will be surprised to know that this one was just terrible. The Committee abhorred the manner in which procurement regulations were flouted and public funds misappropriated in the entire census exercise. The Committee, therefore, recommends that the Director of the Kenya Anti-Corruption Commission should institute a thorough investigation to establish the loss of Government revenue and property due to embezzlement, mismanagement and misappropriation, with a view to prosecuting those officers who were involved in the mismanagement and misappropriation of public funds assigned to this project. We had given examples, where small items such as rubbers and pencils were bought at hundred times the original price, but were not even delivered. When you look at the stock cards, you will see that there is nothing to reflect delivery of those items. This culture of impunity needs to be arrested like yesterday. The seventh example is a case study on a Government gone haywire on creating ghost projects for purposes of looting public funds. I am referring to Loitokitok Customs Offices Project on pages 36 to 38 of the 2000/2001 Report. The Committee visited this particular facility. The Committee was informed that a Customs border point at Loitokitok was built at a cost of Kshs603,678,899 and was handed over to the Kenya Revenue Authority (KRA) in the year 2000, without any water supply, furniture and other facilities. A contractor was, therefore, awarded a tender to build a borehole at a cost of Kshs1,565,100. The contractor attempted to drill three boreholes that yielded no water. He claimed that the area had volcanic ash, boulders, as well as very hard ballistic rocks. The Committee was further informed that only 16 out of the 86 houses constructed were actually occupied. This was actually a rip-off. It was never meant to serve any purpose. The KRA had been granted permission to use the vacant units for training. There were no trainees. The Committee notes with concern the irresponsible manner in which the entire project, which had no feasibility study, was poorly planned and executed before even ascertaining how the building would be utilised. It was a project with no purpose, except the sole purpose of looting from the public coffers. The Committee, therefore, notes that by the time of this site visit, Kshs500 million had been paid, leaving a pending bill of Kshs612 million. The Committee also noted that the supervisory team of the project, Ministry of Roads and Public Works, contributed greatly to the loss of public funds through unnecessary contract variations, including exceeding the legal limit. April 22, 2008 PARLIAMENTARY DEBATES 563 Once you vary a project beyond 25 per cent, it is supposed to be a new contract that should be tendered. But here, they were giving completion certificates and varying the tenders. So, a project that would have cost us very little money, ended up with over Kshs1 billion. We suspected that this particular project was really a rip-off. The Committee, therefore, makes five specific recommendations:- (a) The then Accounting Officers in the Ministries of Finance and Ministry of Roads and Public Works should be held responsible for the losses incurred by the Government in this project. (b) The Accounting Officer should ensure that the buildings are immediately put to some good use in order to safeguard them from vandalism and further deterioration through wear and tear. (c) No payments should be made to the contractor (Donwood) and the contractor should be blacklisted. (d) The Director of the Kenya Anti-Corruption Commission should institute investigations into all the transactions involving this project with a view to having all the officers involved in the transactions brought to book. (e) The contractor, Donwood, should be deregistered and precluded from future award of Government contracts. The eighth example is on a loan that was given to Telkom Kenya Limited. The Committee was informed that the Treasury paid Kshs2,608,881,000 to Telkom Kenya Limited as licence fee for Safaricom. The sale of Telkom Kenya Limited shares to a strategic partner did not take place. The loan, therefore, remained outstanding. Telkom Kenya Limited submitted a new proposal for repayment of the loan and that the said corporation was in default in repayment of the loan in accordance with the terms of the signed agreements. The Committee noted with concern that the loan to Telkom Kenya Limited has not been repaid to the Exchequer. The Committee was also concerned that the Government was not receiving dividends or revenue from its shareholding in Safaricom. The Committee, therefore, recommends that the Accounting Officer should ensure that the loan granted to Telkom Kenya Limited, amounting to Kshs2,608,881,000 and the interest accrued, should be repaid by the 30th June, 2008. Of course, this is something that the next Committee should be looking into. That time could just come and elapse like it happened in the past. The Committee also recommended that the Accounting Officer should ensure that Government receives, in full, all the revenue owed by or outstanding from Safaricom in form of dividends."
}