Why top Chinese contractors are forging political alliances

We have yet again been taken through a gripping lesson on the growing power and influence of well-connected Chinese contractors in Kenya.

On the surface, the battle over the lucrative contract to build the Thwake Multi-Purpose Dam was just but another fight between the Sinohydro and fellow Chinese contractor Gezhouba.

But going on behind the scenes was an even more vicious, high-stakes battle pitting politically powerful backers on opposite sides of the fight between the two Chinese firms.

Which is why it did not surprise that a mundane procurement dispute between two Chinese contractors was elevated into a high-stakes dispute fought across multiple power centres and key-decision-making institutions within government, from boardrooms of the Ministry of Water and Irrigation to the Office of the Attorney-General, the National Treasury, and to the parliamentary Committee on Agriculture.

The Thwake Dam story represents one of the rare cases where the Ethics and Anti-Corruption is called in to investigate an on-going procurement.

POLITICAL UNDERCURRENTS

Yet another sign of heavy political undercurrents was the fact the principal secretary in the Ministry of Water Development, Mr Patrick Mwangi, and his Cabinet Secretary, Mr Eugene Wamalwa, found themselves on the opposite sides of the divide, pulling in different directions on the matter.

The public display of differences between the duo and the open defiance by the principal secretary, were clearly one of the most intriguing asides in the saga.

But more significant, the disagreements showed clearly that the protagonists were aware that real and effective power in this conflict was in the hands of an authority above both of them.

In the din of the controversy, a powerful player and backer of one of the Chinese contractors I spoke with predicted to me that some of the top government officials involved in the dispute would be sacked by President Uhuru Kenyatta.

Yet when the changes he predicted eventually happened, none of the top civil servants involved in the conflict was shown the door.

LOWEST BIDDER

When you present this dispute as if it was all about how Mr Mwangi had refused to award the construction of Thwake Dam to the lowest bidder, you miss the point completely.

How can a civil servant risk his neck so recklessly on such a hotly contested issues with high political stakes?

If you read through a report by the independent consultants, Smec International, you will realise the issues behind the dispute were not as clear-cut as we have been made to believe.

This dispute presents a classic example of the intense subterranean infighting that usually breaks out when you pit interests of different segments of the political elite against each other when fighting over opportunities to patronise and broker Chinese-funded projects.

We often forget that being a broker or point man for a big Chinese contractor involved in a huge project is a very lucrative affair today.

POLITICAL POINTMAN

When you study the trends, you will notice that each of the big Chinese contractors doing major projects in the country has aligned itself with a political point man or broker, usually a well-connected operative with friends in high places.

And, when as a Chinese contractor, your backers and point men lose political power and influence, hell breaks loose; all of a sudden, you will be hit by tax demands and subjected to investigations by Immigration authorities.

The shenanigans and tribulations surrounding the Chinese contractor Catic, especially after it lost the contract for construction of the Airport Greenfield project is a case in point.

The Chinese telecommunications giant, ZTE Corporation, found itself in the soup when its top officials were ordered out of the country while it was the middle of prosecuting a procurement dispute involving the national police telecommunications project.

FIGHTING HARD

The lucrative contract it was fighting so hard to clinch ended up indirectly being performed by its rival, Huwawei Telecommunications Ltd.

What lessons have we learnt from the fight over Thwaka Dam? It is that fierce competition for contracts by Chinese companies is bound to emerge as a major political factor in sub-Saharan Africa.

The Chinese have mastered the art of winning contracts by keeping friends in high places. All over sub-Saharan Africa, corrupt elites and crafty Chinese contractors are forming political alliances meant to circumvent and defeat rules governing transparent tendering.

As competition for contracts intensify, they will want group together and raise money as they scheme to fund and push their allies into high political office.

Many civil servants find themselves caught in the crossfire.

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