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Ministry ignored all warnings on Tokyo deal: report

Saturday October 16 2010

Foreign Affairs Minister Mr Moses Wetangula could face the biggest test of his political career if the House Business Committee puts the motion to debate the report on Tuesday’s Order Paper.Photo/FILE

Foreign Affairs Minister Mr Moses Wetangula could face the biggest test of his political career if the House Business Committee puts the motion to debate the report on Tuesday’s Order Paper.Photo/FILE 

By JOHN NGIRACHU [email protected]

As Kenyans await debate on findings of a House probe into the Tokyo embassy saga, details from the report tabled last week indicate that the ministry bought land to build an embassy against the advice of a lawyer, an architect, a valuer from the Lands ministry and a real estate agent.

The report of the Parliamentary Committee on Defence and Foreign Relations says the Kenyan government therefore lost about Sh1.1 billion in the controversial project.

The probe, which was triggered by an investigative story first carried by the Sunday Nation several months ago, also uncovered an additional loss of an estimated Sh84 million in the purchase of a building to house Kenya’s embassy in Brussels, Belgium, which was way above the stated market price.

The ministry also included the cost of renovations to the building and furniture that was more than 10 years old, which was deemed valueless as there is no market for secondhand goods in Belgium.

Valuation

In the Tokyo deal, the ministry went ahead to buy the land against a valuation report by Dick Olango, a Kenyan architect based in Japan, an independent valuer and that of the Kenyan Lands ministry.

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According to the report now before Parliament, Ms Coral Corporation, the real estate agent, had declined to evaluate the building on the land in Tokyo because it considered it too old.

A valuer from the ministry of Lands, Teresia Kimondiu, had told the Foreign ministry that an access road on the plot and the fact that it did not front the road would reduce the area available for construction.

But the most damning report arose from Kijima International Legal Office in Tokyo, which warned that the price was higher than the true value of the property and the manner of the sale was considered “very unusual” in the normal order of conducting business in Japan.

“Please be kindly informed that the scheme the (Kenyan) government agreed is very unusual, and we could barely see such a transaction in Japan,” said Mr Yoshito Kijima. Mr Kijima described as “fatal” the ministry’s apparent failure to conduct basic research on land values in the area before proposing to buy the land from Nobuo Kuriyama, Taeko Kuriyama and Hideko Kuriyama, its owners.

“It is very difficult for us to understand why the (Kenyan) government wants to take this kind of risk and why they entered the deal without basic research,” writes Mr Kijima. He went on to describe the deal to buy the property as “very irregular” and warned that no expert in Japan would risk involvement in the sale process.

Mr Kijima also questioned the ministry’s move to pay 80 per cent of the money up front, given that historically, it was common to pay 10 to 20 per cent first and the rest after the ownership had changed. The explosive report was the subject of heated debate in Parliament last Thursday.

Foreign Affairs minister Moses Wetang’ula was spared MPs’ wrath when Deputy Speaker Farah Maalim adjourned House business after a dispute emerged over different Order Papers that afternoon. The committee wants “necessary action” taken against the minister, who it accuses of deliberately misleading it on the key facts of the case.

The minister had earlier told MPs that the ministry got value for money in the Tokyo deal. The report also indicts Permanent Secretary Thuita Mwangi, the deputy head of mission in Tokyo, Allan Mburu, A. M. Muchiri, who was recently posted as Kenya’s ambassador in Tripoli, Libya, and any other official involved in the purchase of properties in Tokyo.

The committee says in its report that the ministry deliberately avoided using a lawyer in the transaction, which the minister said would have cost the ministry Sh45.7 million. The lawyer would easily have worked at a cost of Sh3.4 million, the committee says it found out in Japan.

The minister is also accused of misleading the committee about the shape of the plot, which he claimed was irregular and therefore unsuitable for the construction of a chancery – the building that houses the embassy –  and an ambassador’s residence.

“This statement contradicts the report of the architect commissioned by the mission, who advised that the plot offered by the government of Japan allows more floor space, a tall structure is possible which could also cater for other diplomats’ apartment and hence cut the monthly rent,” says the report.

Mr Wetang’ula told the committee that Dennis Awori, the ambassador then, chaired the meeting that decided to purchase the premises at Meguro-Ku, but the envoy told the same committee he had left for Botswana at the time of the meeting.

While testifying before the committee, says the report, the Sirisia MP also stated that the plot offered by the government of Japan had a caveat that allowed the Japanese government to excavate it at any time for archaeological materials.

But information from the embassy showed that the whole of Tokyo is considered an archaeological area, and Algeria, Pakistan and the European Union were constructing related offices in the same area.

Mr Wetang’ula is yet to offer his defence on the report, but Mr Thuita, the PS, said in a statement that the report is aimed at achieving an ulterior motive and does not show clearly how the Sh1.1 billion was lost.

PS’s statement

“Every bit of information in the report is twisted to fit in a premeditated inclination to find fault with the ministry,” said the PS in the statement. Mr Wetang’ula could face the biggest test of his political career if the House Business Committee puts the motion to debate the report on Tuesday’s Order Paper.

It has also emerged that the minister’s move to invite the Kenya Anti-Corruption Commission to investigate the matter could have been a last-ditch effort to extricate himself from the questionable deal.

“It’s possible the minister had seen the committee report and realised he was in trouble... that’s why he was writing to KACC on October 1, days before the committee tabled its report in the House,” said an MP who cannot be quoted without compromising his position on the matter.

It is also noteworthy that KACC had already sent its investigators to Tokyo to investigate the matter soon after news of it broke. Why would the anti-graft agency want to investigate it again? Whatever the outcome in Parliament, the Foreign ministry has been firmly placed in the league of those mired in questionable deals and Mr Wetang’ula and Mr Mwangi put in a tight spot.