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"content": "Mr. Temporary Deputy Speaker, Sir, I beg to move:- THAT, this House adopts the Report of the Public Accounts Committee on the Government of Kenya Accounts for the year 1999/2000 laid on the Table of the House on Thursday, 26th October, 2006. I want to thank you for giving me another chance to move this Motion. This is a report done by the same Committee that I chaired then. I would like to thank the hon. Members of the Committee who spared their time to enable the Committee, for the first time in the history of this country, to do two reports in one year. At this pace, we would have been current if we were given a chance to move on. As it were alliances and positions keep changing and, therefore, that is where we are today. This is a year that we were so busy at the Bomas of Kenya and yet we had to work late hours to present this report in the interest of Parliament being current in terms of the Committee's mandate. I will now go through the brief, which is going to be the base of debate on this Motion. On behalf of the hon. Members of the PAC, I take this opportunity to present to the House the report and the recommendations of the Committee on the 1999/2000 Report of the Controller and Auditor-General, together with the Appropriations accounts. The Committee commenced its sittings on 16th April, 2003 and held 105 sittings. The Committee noted that most of the queries that were contained in the 1998/1999 Report were also in the 1999/2000 Report. As a result, the Committee took evidence on queries which were contained in the two reports in order to clear the backlog. I would like to underscore that position, that the Committee that I chaired then, presented a selfless service and committed its time to produce the two reports in one year. Mr. Temporary Deputy Speaker, Sir, Accounting Officers of Government Ministries and Departments which had audit queries in any of the two reports appeared before the Committee and gave evidence on issues raised by the Controller and Auditor-General. In this Report, they also gave the Committee written submissions. All the evidence and written submissions which we received, were subjected to thorough scrutiny before the Committee arrived at the recommendations on the queries raised by the Controller and Auditor-General. Mr. Temporary Deputy Speaker, Sir, the Committee comprised of the following Members:- The hon. Omingo Magara, MP - Chair, The hon. Uhuru Kenyatta, MP The hon. Joseph Kipchumba, MP The hon. (Dr.) Julia Ojiambo, MP The hon. Billow Kerrow, MP 4152 PARLIAMENTARY DEBATES December 5, 2006 The hon. Sospeter Ojaamong, MP The hon. Archbishop Ondiek, MP The hon. Koigi Wamwere, MP The hon. Ekwe Ethuro, MP The hon. William ole Ntimama, MP (He served until 30th June, 2004 when he was appointed as Minister then. The hon. Boniface Mganga, MP (He served until 30th June, 2004, when he was appointed Assistant Minister). Like I said when I was moving the Motion, this was during the formation of the Government of National Unity (GNU), which I am now informed replaced the NARC Government. Again, only for Mr. ole Ntimama to be fired thereafter upon taking a different position. The Committee undertook inspection tours of various projects in order to obtain first-hand information on their status and establish whether the Government got value for money in those projects. They included the Moi-Kaptiret Road. As explained in the main Report, the job done on this road was extremely shoddy. The cost of the contract was not warranted and as it were, the details in the main body of the Report will explain this. Mr. Temporary Deputy Speaker, Sir, they also included the Ministry of Roads and Public Works office building at Eldoret Town. Some buildings were done and I think they are almost like monuments which are not being used. There was also Elgeyo Saw Mills which was closed courtesy of the logging and the preferential treatment to the other millers. I believe the licence was actually cancelled because of lopsidedness of political interest or competing political interests. The observations and recommendations of the Committee on the projects visited are contained in the specific audit queries. All recommendations made were arrived at by consensus after careful scrutiny of evidence and submissions received as well as the inspection tours made. For this reason, we want to urge the Minister for Justice and Constitutional Affairs to implement this Report judiciously without fear or favour because as I said last time, we actually arrived at a consensus and after careful scrutiny. Furthermore, we had an Archbishop in the Committee who usually prayed for us as we started and as we finished! Occasionally, we would also pray in the Islamic religious way. Mr. Temporary Deputy Speaker, Sir, the Committee urges the Houses to adopt the recommendations and also requests the Government to implement them without fear or favour. Transparency and accountability should be encouraged in all Government institutions in order to ensure that corruption is eradicated in Kenya. When corruption ceases to exist in Government institutions, it will be easy to root it out in private enterprises. As you know, it takes two to tango. When contractors engage in corruption, they corrupt Government officers--- Since we know that it takes two to tango, we need to stretch further and clear it out from the source or the one who entices you to receive a bribe. The Committee noted that if all the Accounting Officers adhere to the laid down financial regulations and procedures, most of the audit queries would not be raised. Mr. Temporary Deputy Speaker, Sir, let me now turn to general observations, like irregularities on road construction contracts. This is where we have a monster of a mess. I take issue with the technocrats in the Ministry of Roads and Public Works where you find, instead of the contractor raising an issue that: \"I want some money increased in terms of actualising the contract\" it is the technocrats who advise them that: \"Due to the El Nino phenomena, for example, you can now raise a further variation.\" In most cases, you will find that the contracts have been revalued upwards to more than double what the initial cost was. At the end of the day, the road ends up being worthless after less than two years. We visited Ziwa- December 5, 2006 PARLIAMENTARY DEBATES 4153 Gitare Road. We saw the thickness of tarmac was paper thick. Imagine they were fully paid. Some of them were paid to the extent of more than 100 per cent for the effective job of 20 per cent, courtesy of the free flowing tap from coffers which people need to tighten, but because they are partakers, they participate in the same and encourage the same. The Committee noted with great concern that contracts for several roads constructed during the period under review were varied unjustifiably and, in many occasions, the Government did not get value for money. Several nugatory payments were also made. The Government paid for no service rendered. For example, the contract for the construction of Ziwa-Gitare Road was varied by about 151 per cent of the original contract sum. Procurement rules dictate that if you are revaluing more than 10 per cent or 15 per cent, you must go for re-tendering. We were reliably informed that somebody would quote the lowest, knowing, for sure, that he will re-tender a revaluation of the contract to look for more payment to the extend that we have people being paid more than one-and- half per cent times of the original cost. During the construction of the Mara-River Road, a sum of £10 million was paid as accrued interest arising from delayed payment, numerous charges due to late advance payment and delayed issuance of commencement owed. The contract for construction of Gambogi-Serem Road was varied by about 145 per cent of the original contract cost. A contract for the construction of bitumen standard of 20.7 kilometre of Kapsigak-Kituma Road was awarded to a firm in 1997 at a contract cost of £21 million which is about Kshs500 million. The contractor performed until December, 1998 and completed only 20.2 per cent of the contract work and was paid £25.23 million which is about Kshs560 million for a job that was worth 20 per cent done. In June, 1998, a contract for the construction of Mwingi-Kabunga Corner Road was awarded to a firm at a contract sum of £25 million. The contract was varied three times and the Government eventually paid £51 million. Mr. Temporary Deputy Speaker, Sir, as I had notified hon. Members earlier, the figures that compute these accounts were done in pounds and a Kenya pound is equal to Kshs20. Therefore, if you are talking about £51 million, we are talking about in excess of Kshs100 million. The Committee noted that competitive bidding loses its purpose if the contract is then varied to a point where the amount eventually paid is more than what was quoted by the highest bidder. Ordinarily, the highest bidder will take specific quantities and technical inputs to arrive at a higher fee. If you give a poor contractor who quotes less and does a shoddy job. I did have a chance to ask one contractor: \"Why, as a reputable contractor, would you want to do a job such as this?\" The answer was that: \"If somebody wants to eat on the pavement, where do you get the material for the pavement?\" That is the cause of the variation of the contracts to the extend that we give Kenyans no value for their money. The Committee recommended that re-evaluation of the contracts be done after the sourcing Ministry and the Ministry of Roads and Public Works are satisfied with the reasons given by the contactor. The contractor should also comply with the laid down procedures with regard to variations of the contracts. On the issue of ex-gratia compensations and ex-gratia payments, that is yet another window where the Attorney-General and some Ministries have found a way to syphon Government resources. What happens occasionally is that someone is awarded ex-gratia payment, either in bonded terms or injury, and it takes more than ten years for the parent Ministry to be advised about the verdict reached in the arbitration. Therefore, the victim ends up being paid ten times more than they would have been paid, just because the parent Ministry did not get the verdict from the Attorney-General's Chambers in time. Those kind of payments are induced by people working for the Government, especially at the Sheria House. The motto the officers have at the building makes no sense to them. In some cases, you will find a Ministry losing a case against a contractor because a 4154 PARLIAMENTARY DEBATES December 5, 2006 wheelbarrow which is wheelless was left on site, in the name of not completing the project. When the Ministry loses the case, the Attorney-General and his team do not advise the Ministry to go for an appeal. I know of a case where a Permanent Secretary recommended for an appeal but was advised not to worry about the case and to settle it outside court. Obviously, that was done for a kick-back and the Government lost a lot of money. The reasons why we lose money, including in the Anglo Leasing type of projects is because of lack of technical legal advise. If the Attorney- General, the chief legal adviser to the Government can flout the law, how can he advise others? There is no way he can advise other people because those concerned will go after him. So, he would rather advise wrongly and cover his own mess. The Committee noted with concern that there was a lot of delay in settlement of payments against the Government. The Committee was informed that the delay by Ministries in settling claims after judgements had been passed by courts was caused by failure of the Attorney-General's Office to communicate court awards to Ministries in time. The Treasury's slowness in granting authority to settle awards and lack of budgetary provisions because of expenditure was unbelievable. The Committee heard the following concerning the Ministry of Health: First, that the Ministry of Health is the one which mostly incurs ex-gratia payments. The Attorney-General did not inform the Ministry when judgement was entered against it in a civil suit in 1998, against a civil application of the year 2000. The Ministry learnt about the judgement through the media. The media acted the role of the Attorney-General. Four civil suits and judgements were entered against the Ministry of Health in December 1997, and it was ordered to pay £586,000. The Attorney- General informed the Ministry in August, 1998. Despite the Attorney-General being given instructions to enable him file a defense for a civil suit in 1981, the Government went unrepresented, prompting the court to enter judgement against the Ministry on 21st January, 1991. The Ministry learnt about the judgement ten years later. This is similar to the issue of the contractor leaving a wheelbarrow on site. You can see how much more we have lost, courtesy of this weakness."
}