KPC boss Joe Sang fights tender scam claims

Kenya Pipeline Company on Tuesday fought off reports that it had lost more than Sh95 billion in skewed procurement deals, saying all tenders were subjected to relevant laws and regulations.

Investigations by a multi-agency team from the Ethics and Anti-Corruption Commission (EACC) and Directorate of Criminal Investigations are centred on claims of hugely inflated prices for procurement deals undertaken in the parastatal in the recent past.

Already, three company officials have been sent on leave to pave the way for investigations on alleged tender irregularities at the company.

General manager, finance, Samwel Odoyo, procurement manager Nicholas Gatobu and specialist welder Amina Juma are being investigated over a Sh600 million tender for supply of hydrant valves for use at the Jomo Kenyatta International Airport in 2014.

HOMES SEARCHED

On Tuesday, KPC managing director Joe Sang said the three, whose homes had already been searched by EACC detectives, had been sent on compulsory leave as the firm prepares for investigations into tenders carried out in the last three years.

Mr Sang, however, said all the 12 projects had been carried out as set out in the State Corporation Act, the Public Finance Management Act, as well as the Public Procurement and Disposal Act.

“The KPC board of directors was at all times fully appraised of all the projects and indeed gave all the necessary approvals. The allegations of a loss of Sh655 million is not true. Other than the initial 40 per cent of the contract sum of $2,563,796 paid via a letter of credit dated March 3, 2015, no further sum has been paid by KPC,” Mr Sang told journalists.

A document seen by the Nation also shows that the Directorate of Criminal Investigations is also looking into close to 30 tenders and issues of concern at KPC totalling Sh58.8 billion.

AWARDED TENDER

Aero Dispenser Valves Limited is said to have been awarded the tender at an inflated cost and later given favourable letters of credit despite financial capability being a crucial component of the qualification to supply the valves.

Auditor-General Edward Ouko, in his 2017 report, flagged the tender process, which also involved a two-year contract for the supply of operational spare parts.

“Although the spare parts were delivered to the company in July 2015, they were not formerly inspected and received for use.

“Under the circumstances, I am not able to confirm the company’s compliance with procurement procedures and the propriety of the contract amount of Sh655,880,009 incurred in the supply of hydrant pit valves,” Mr Ouko wrote.

Even though Mr Odoyo and Mr Gatobu have been sent on compulsory leave, they were still bound to be suspended after President Kenyatta ordered all procurement and accounting unit heads in ministries, departments, agencies and State corporations to step aside ahead of fresh vetting.

TENDERING COMMITTEE

Mr Odoyo has said he was not part of the tendering committee meeting that approved the evaluation report and negotiations with Aero Dispenser Valve.

The finance manager, who gave an account of the events that led to the procurement of the equipment that is now under question, said a memo sent by Mr Charles Maitai “articulated the need” to replace all the 60 non-compliant hydrant pit valves at the JKIA.

“A memo dated December 2, 2014, from procurement officer II, Mr Fredrick Ogenga, through the procurement manager Nicholas Gitobu to the tendering committee, requested approval for use of direct procurement method to the original equipment manufacturer Cla-Val company,” he said.