How firm made Sh50m from one 5-hour NYS event

A decision to transfer any tender worth more than Sh2 million from the National Youth Service (NYS) to its parent Devolution ministry in February could have opened the floodgates to controversial procurement and payments, including an attempted Sh826 million fraud and a staggering Sh49.6 million spent on a five-hour event in Kibera attended by President Uhuru Kenyatta, the Sunday Nation can reveal.

Documents indicate that Transcend Media Group, which is also offering many other services to the ministry, was paid Sh49.6 million for “event concept cost for hosting Kibera Youth Empowerment Programme”. This included organising the evening event to launch a street lighting project on December 11 last year that was attended by the President, Deputy President William Ruto and Devolution Cabinet Secretary Anne Waiguru.

The event, which the Sunday Nation covered at the time, lasted from about 5 pm to 10.30 pm on the eve of Jamhuri Day at the DC grounds in the expansive slum.

There were about a dozen tents, two platforms — one for the President’s entourage and the other for guests. Entertainment was largely sourced from groups in the slums although some national artistes like gospel singers Gloria Muliro and Bahati also performed.

NYS officers assisted police in providing security.

According to a payment voucher from the ministry seen by the Sunday Nation that indicated the money was for the December 11 event, an approval for the payment was given in March.

On Saturday, Devolution Principal Secretary Peter Mangiti maintained that looking at the payment voucher alone gave a false impression.

“Just having an invoice and a payment voucher would not tell you if an event is overpriced.  It’s only after you have a breakdown of what happened and where each of the moneys went that you can arrive at that conclusion,” he told the Sunday Nation.

Mr Browne Kutswa, the communications officer for the ministry, said simply relying on the paperwork was misleading. “I don’t think the whole 49 million was paid for the event alone because it is not possible.”

Transcend Media CEO Tony Gatheca told the Sunday Nation that the amount was not just for the single-day event.

“TMG (Transcend Media Group) was contracted to carry out youth empowerment project in Kibera. This included production of on ground branding, event set-up and management which included community mobilisation, building a unique stage to accommodate VIPs, providing adequate security, sound lighting, entertainment fees, NYS merchandise giveaways and production of a youth documentary that was aired live,” said Mr Gatheca.

MORE QUESTIONS

However, payment vouchers indicated separate multiple payments to the company for publicity rollout for NYS branding, consultancy and delivery of a six-months interim report.

Even raising more questions is the fact that a majority of these types of payments that have been deemed controversial were made after the PS instructed the NYS Director Nelson Githinji that all tendering above Sh2 million be moved to the ministry’s headquarters.

“In an effort to streamline the procurement process in the ministry, it has been decided that all procurements within the threshold of Sh2 million and below be done at the NYS headquarters and those above that threshold be carried out at the Ministry Headquarters,” said a letter from the PS dated February 20.

The letter added: “This has been brought about by the need to facilitate the efficiency of procurement processes, maximisation of the economy and efficiency and to ensure the appropriate choice of procurement procedures to avoid any unwarranted split of procurement.”

Some of the procurement and payments that have raised questions in the last few weeks include an approval to pay millions of shillings for consultancies, organising event, publicity, road shows and various food supplied at prices way above the market rate. 

In his response to enquiries by the Sunday Nation, Mr Mangiti argues that the intention of the letter was to enforce already existing procedures at the ministry.

“According to Ministry procedure we have only one Ministerial Tender Board (MTB) that handles all procurements above Sh2 million. The rest are handled by the tender committee. I was just reminding people,” he said.

NYS Deputy Director Adan Harakhe was appointed to be in charge of administration, finance, procurement and human resources. However, the letter by Mr Mangiti took away the tendering role but retained the power to make payments with the NYS.

It was at this point that companies like Fresco International Ltd among others were awarded huge tenders for supply of green grams and other food items at prices deemed to be beyond market rates.

In a letter to NYS Director General Nelson Githinji dated June 24, Fresco requested an undertaking for payments of the commodities they had supplied.

The unfolding NYS storm has also raised questions about a vision strategy that the Devolution ministry had paid The Consulting House led by Mutahi Ngunyi to formulate.

Mr Ngunyi is said to have been paid at least Sh38 million to consult for NYS. Some of the proposals in the 5-point plan appear to be slight modifications of the 2007 NYS Review Taskforce report, a copy of which Sunday Nation has obtained.

'NONSENSICAL'

The taskforce had been appointed by former Youth minister Mohammed Kuti to review the objectives of the National Youth Service Act and their relevance to present day Kenya; propose amendments to the Act in view of the changing youth agenda; examine the institutional reforms internally proposed by the National Youth Service; and to review the curriculum followed at the basic training school among others.

It was chaired by Donald Kibera while John Silas Nyamato was the vice chairman. Mr Ngunyi has since last week dismissed the taskforce’s report as “inferior”, and that the allegations of possible plagiarism of the 2007 report as “utter political nonsense” pushed by former Prime Minister Raila Odinga.

“That particular allegation is nonsensical. I saw the terms of reference of the taskforce which were not innovative enough and had no component on social transformation and daily savings that we recommended,” said Mr Ngunyi.

But a keen look at the 5-point vision that Mr Ngunyi developed against the taskforce’s report reveals a striking semblance.

Some of the most glaring ones were the proposal in the new plan to recruit 21,870 youths per year who “will disciple” 227,670 youths per year” translating to one service man or woman mentoring 10 other youths. The 2007 taskforce had proposed increasing the number of recruits to “at least 20,000” annually and mentor at least 10 youths.

NYS, according to the taskforce report, was also to be rebranded with change of uniform and colours, which are not far off from what eventually was implemented following the recommendations of the consultants led by Mr Ngunyi.

The taskforce had also proposed that the NYS graduates have a form of saving, something that the recently hired consultants have also recommended.

In terms of the service after graduation, the taskforce had recommended that the graduates be involved in “dam construction, road construction (and) slum civil works” as a means of income generation.

In doing that, the government was required to employ youths who would also engage in “income generating activities that has direct effect or impact on the youth and population where they live.”

On the other hand, the 5-point vision had recommended that NYS “be organised into nine units” for dam and road construction, vector control unit, slum civil works and public environment, Huduma kitchens traffic control, public security and agriculture.

Meanwhile, the ownership of companies that were awarded tenders to supply different goods and services can also be revealed.

Payment vouchers seen by Sunday Nation show that the NYS paid more than Sh600 million for goods and services rendered to the institution in the past half year.

One such company was Things of Desire Ltd which at one time supplied rice worth over Sh37 million. The payments were made on May 25 this year. According to documents from the registrar of companies, the company is owned by three individuals, namely Susan Wanjiru, Sylvia Nyambura and Victor Muriithi.

The company was registered in 2009 and has its headquarters in Nairobi. Another company was Bora Global Ltd which supplied powder milk to NYS and was paid Sh50 million.

According to a letter dated May this year, the Central Bank of Kenya sought information on the purpose of the payments to Bora Ltd and whether the goods were supplied.

Records indicate that Bora is owned by two individuals and was registered in October 2013. The two directors, Maria Nyambura and Wilson Waihenya, have one hundred shares each.

Another company was Alpha Mercantile which supplied plastic water tank and sugar. The payments were Sh6.7 million and Sh7.5 million in that order. The company was registered in December 2013 under the ownership of Njeru Mucheru, Simon Migwi and Dainah Wanjiru.

Some companies that conducted business with NYS were owned by the same individuals.

For instance, the ministry paid more than Sh150m to a company owned by a Josphen Kabura Irungu. She is the owner of Roof and All Trading and Reinforced Concrete Technologies, which were awarded tenders worth Sh77.2m and Sh115.8m.