alexa Rotich says tendering handled by line ministries and agencies - Daily Nation

Rotich says tendering handled by line ministries and agencies

Sunday March 10 2019

Henry Rotich

Former National Treasury Cabinet Secretary Henry Rotich. PHOTO | FILE | NATION MEDIA GROUP 

NATION REPORTER
By NATION REPORTER
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The National Treasury Cabinet Secretary Henry Rotich distanced himself from the controversial tendering processes for the two dams that saw phantom companies paid Sh21 billion during his questioning last week.

Mr Rotich, through his lawyer Katwa Kigen, maintained that the he had nothing to do with the tendering processes that led to the payments as they were handled by the respective line ministries and agencies.

PROCESSES

Mr Rotich also sought to explain the Sh21 billion said to have been paid to phantom companies with no work done.

The Director of Public Prosecutions (DPP) Noordin Haji had noted that preliminary investigations had established that a large number of government officials were involved in the scandal.

He added that the investigators drawn from the Directorate of Criminal Investigations (DCI) and prosecutors from the DPP’s office are looking at the entire tendering process, the awarding of tenders without project designs, attempts to manufacture designs after the fact and failure to secure any of the land required for the projects.

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The teams are also investigating the disputed ownership of the land for the projects, the failure to compensate landowners, the payment of Sh21 billion to contractors notwithstanding the anomalies in the tendering processes and the legal status of the alleged contractors in their home countries.

Mr Kigen confirmed that the question relating to the procurement and tendering was put to the CS, who said he was not involved at all in the processes.

“Issues of procurement and awarding are all done by the procuring entity, supervised by their line ministries. These processes do not involve CS Treasury. The CS was asked (the questions) and he gave the above reply,” Mr Kigen stated.

DESIGNS

“KVDA and the two dams (Arror and Kimwarer) fell under a number of ministries at different times in the course of this project,” he said.

According to Mr Kigen, Mr Rotich explained to the investigators that the roles of the agencies and the line ministries included ensuring that proper procurement processes in law was done, projects were implemented within the applicable laws and contract terms and ensure payment for work done.

He noted that contrary to Mr Haji’s assertions that there were no project designs, Mr Rotich had explained to the investigators “the correct position” thus: “EPC+F projects are internationally recognised contractual devises. The contract devise entails and incorporates 'design'. It is therefore erroneous to say that the contracts herein which was an EPC+F contract was faulty because it lacked designs. The contract itself triggers the designing,” he explained.

On the huge number of government officials Mr Haji said were involved in the scandal, Mr Kigen said his client expected that those involved would be questioned as well.

“We are assuming other people will also be called to assist in the ongoing investigations,” he noted.

Mr Rotich, according to the lawyer, also explained the amounts paid, which Mr Haji put at Sh21 billion.

AGREEMENT

“One must appreciate that there are three milestones in such contracts (a) procurement (b) commercial contract (c) facilities agreement. The commercial contract sets out the contract price and terms. It is on this contract that Sh7.1 billion (subject to exchange rate) was advanced to the contractor for mobilisation against a performance bond/security.”

He further explained that the balance of the about Sh13.9 billion was paid under the facilities agreement for arranging, structuring and agency, commitment and insurance fees all at rates that are internationally applicable.

“These are charges and fees paid to secure the loan, and are neither paid to the contractor nor are they part of contractual sum under commercial contract,” he said, in an attempt to dispel the DPP’s claims that the Sh21 billion was paid in an irregular manner.

“All these are internationally applied procedures and payments, Kenya and world over have infinite similar contracts where this process and rates have been applied and paid,” he added.

PROPERTIES

Mr Haji in his statement had noted that the investigators were training their eyes on properties that may have been acquired from the proceeds of the Sh21 billion payments.

“Most crucially, we must get a handle on more than Sh21 billion that has already been paid out, trace where and whom every shilling has been paid to, trace and establish any intended corrupt payments,” he noted.

“I have directed that financial investigations that may lead to identification of any properties that are proceeds of crime be given top priority to ensure that any ensuing prosecutions will not only be limited to securing convictions against the perpetrators of the fraudulent activities, but also be predicated upon recovery of public funds that may have been improperly expended,” he noted.

Mr Haji’s statement came only hours after Mr Rotich spent long hours being questioned at the DCI headquarters on Kiambu Road in Nairobi.