Cereals board’s work grounded
PHOTO | JARED NYATAYA | FILE Farmers wait to transport fertilizer bought from the National Cereals and Produce Board, Eldoret depot on April 16, 2012. The Cereal Board's bank accounts have been frozen.
What you need to know:
- Accounts frozen after firm that didn’t supply grain awarded Sh500m
The bank accounts of the National Cereals and Produce Board have been frozen, managing director Gideon Misoi said on Wednesday.
This comes after a disputed Sh500 million arbitration award.
As a result, the distribution of subsidised fertiliser has been halted.
“That is why there have been delays in distribution of fertiliser,” Prof Misoi told the Nation by telephone.
It started in the drought of 2005 when the government authorised the cereals board to import two million bags of grain for famine relief.
Erad Services was among five companies contracted to supply 180,000 tonnes of maize. Although Erad did not supply a single grain, it based its claim on the grounds that the government changed its mind against importing maize, causing it losses including business opportunity.
Prof Misoi said the irony was that the board did not receive any services from Erad Services, which it contracted in 2005 to supply 40,000 tonnes of white maize at $229 (Sh25,069) a tonne.
In July 2009, the arbitrator awarded Erad Sh43 million a tonne which included storage charges for maize which did not come into the country.
In April, Erad was allowed to take Sh297 million from the board’s accounts. Erad’s directors are Mr Jacob Juma, Ms Grace Wakhungu and Mr John Waluke.
“All our accounts have been frozen. Whatever we are doing is with a lot of difficulty. This is threatening maintenance of strategic food reserve,” he said.
“The supplier did not deliver any maize. The case has been on for a while,” Prof Misoi said.
Under the current arrangement, any money that goes into the board’s accounts in the next 12 months goes directly to Erad Services.
