Kenya's military in new Sh800m row over vehicles

The military has been caught up in a new suspicious deal as its bosses appeared before a parliamentary committee to answer questions about the purchase of fighter jets.

The new claims involve a Sh800 million contract for the upgrading of armoured scout cars by an Israeli company. The firm is said to have been given the contract to fit the cars, bought from France in the 70s, with new engines which had failed to perform.

The government contracted the Israeli firm, Saymar Ltd, to refurbish and upgrade the fleet of armoured cars at the Lanet army depot.

The assignment was to be completed at a contract amount of Sh800 million ($10 million) which the Ministry of Defence paid in advance to Hapobalim B.M of Haifa, Israel.

To protect itself against unsatisfactory performance, the government asked the Israelis to put out advanced payments guarantees issued by their bank and counter guaranteed by a local bank.

Israelis have not performed

Documents seen by the Nation now show that despite the massive commitment made by the government, the Israelis have not performed as per the contract terms.

The information came as military bosses appeared before Parliament’s Defence and Foreign Affairs committee to answer questions about the purchase of 15 F-5 jets from Jordan which are said to be too old to be of any use to Kenya.

In the Israeli deal, the engines they fitted on the armoured have failed to perform forcing the government to threaten legal action.

A November 9, 2010 letter to the Israeli company written by Defence PS Nancy Kirui charged that the firm’s performance was way below par, warning that the government could resort to legal ways of terminating the contract.

Under the contract, the refurbishment of the armoured cars was to be completed by August 31, 2010.

In her letter, Ms Kirui informed Saymar Ltd: “The ministry demands that you deliver proper engines in accordance with the contract specifications and replace the already fitted engines at your own cost”.

Exposing the government much further is the state of the guarantees given by the firm against performance. Early this month, a senior military official, Col I. Odumo, had warned that the guarantees may not be enforceable.

In a letter to Saymar Ltd, Col Odumo demanded to know why the bank guarantee value had been reduced to Sh152 million ($1.9 million) without the knowledge of the ministry

“You are kindly requested to avail documents supporting the withdrawal of $1.7 million (Sh136 million) from the bank guarantee,” he said.

A top military official, speaking to the Nation on condition of anonymity, disclosed that at one point in 2008, the military was forced to engage a specialist in combustion engineering from the University of Nairobi, Prof James Nyang’aya, to test the engines that had been refurbished by the Israeli firm.

He said the tests revealed that the engines were below par.