Kenya Insights

Tag: Amb. John Mwangemi

  • Multimillion Kenya Ports Authority (KPA) insurance tender scandal involving Liaison Insurance Group.

    Multimillion Kenya Ports Authority (KPA) insurance tender scandal involving Liaison Insurance Group.

    One insurance tender fiasco no 037 of July 2022 is haunting outgoing MD John Mwangemi. The procurement unit prepared this controversial tender that saw the head of procurement appeal board intervene.

    Amb. John Mwangemi

    Facts emerging are that the procurement department was sidelined in the award that rested in the hands of the legal department then under Andrea Dena and that of finance manager during tender award.

    It should be noted that legal unit of KPA which has always had interest in thia tender pulled all stops even to the extent of leaking documents to some parties and case taking long with their preffered bidder, liaison having extensions.

    The tender did not proceed as indicated as the current bidder, Liaison insurance was pulling behind the scenes to ensure the specifications met his preference especially for the lucrative dollar accounts incorporating the general manager legal department. What remains was to get a favorable committee.

    While this as ongoing the draft document was leaked whereby all brokers and underwriters managed to get to know what was happening. The document was leaked from insurance office to some bidders who managed to share and go through it. It was then discovered that the document was tailor made to fit a certain firm and in this case, specifically tailored for Liason insurance.

    This firm has managed to capture the insurance wing at KPA. They control who gets tenders, especially in the High-Value Insurance. They’re assisted in this for the last six years by some three senior officers in the legal department name withheld. The tender document for upload to the portal was done around late October to close on November 4 2022. No sooner had the tender been uploaded than a flurry of queries flew in fast. Tender office was vindicated as most of the queries were of hoarding information by the user department.

    It is worth noting that the insurance unit that was formally in legal was moved to finance and the head of legal through the insurance officer overrides the manager commercial and insurance thus handling matters within his unit.

    Surprisingly, the responses governed by the insurance were done in the legal unit with a copy shared with Liaison Insurance. Word has it that Patrick Nyoike then KLA Finance Manager was to make a kill in the insurance tender.

    Some bidders are now contemplating going to the procurement tribunal based on the following reasons:                                            It’s all stated in a letter dated November 20 2022 from the principal officer of insurance submitted through the manager of legal services on December 15 2022 for payment of US 120,000as the variance of port liability for the year ending 2021 a day after submitting the tender report for insurance. Initially this was presented in June 2022 but couldn’t be paid. This is being pushed by the legal officer who was on tender committee and the insurance officer. It was a coincidence it happened that immediately the report was submitted, Liason insurance had been awarded most of the tenders and was still pushing for this particular one.

    If a re-insurer is not comfortable with the quotation that has been submitted by the winning underwriter, the committee should have requested to know if the quotation they gave as required in the tender originated from them. Further, a broker is not supposed to discount once a quotation has been given by the underwriter since all of them are given the same quotation. How come then in the final report some firms who seriously discounted their bids were awarded over five line items of the tender that is considered lucrative? What rationale was used, industry players are questioning.

    The broker’s price schedule for each policy is usually supported by a price quotation from the recommended underwriter which must be signed and stamped on each page. Only quotations accompanied by the underwriter’s quotations duly signed and stamped by the underwriter’s authorized official(s) are accepted.

    The final awards revealed some shocking details. Liaison got 18 out of 34 items and underwriter being Gemini’s Insurance whose fate in the market is currently worrying. How Liaison managed to ensure that they awarded Geminia this account which is currently held by Jubilee is the question. 

    During the opening, the procurement officer a Mr. Sugou read out all the prices to the bidders. Reason given for this was the habit of some brokers interchanging some prices with some committee members. On the final wards some bidders like Amana who were awarded group life for staff was not the lowest bidder. This account was removed from Liasion to Amana with underwriter as Britam.

    It should be noted that some family members of the deceased families have not been paid because of the undercutting or rebating by Liaison.

    Through the help of the purported PA to the MD Anderson Mtalaki, the letters of award were signed by the MD on December 24 2022 and sent out to the successful bidders on December 28 2022 to beat the 14 days window deadline before signing of contract. Information from legal which is currently preparing a paper for the MD is that in the case the award is appealed they should continue using the current providers whom they are claiming have experience in handling KPA matters.

    The evaluation of KPA insurance tender by KPA was done without the committee putting into consideration the reinsurance arrangements for the risks listed in place. 

  • Management Changes At KPA Amidst Fraud Claims

    Management Changes At KPA Amidst Fraud Claims

    The Board of Kenya Ports Authority has been forced to make some changes in the senior position amidst claims that some of the departments heads are engaged in fraudulent activities.

    Cosmas Makori, the acting head of procurement has been axed from the positions as he was found to have overstepped his mandates. According to reports, Makori is accused of irregularly awarding tenders outside the scope of full board and management.

    Makori was replaced by Everline Shigoli.

    The suspended official is said to have been notorious with interfering with procurement process and in some instances allegedly changed the specifications of tender details favorable to cronies.

    Makori is said to be boastful and tells any one who cares to listen that he’s untouchable and enjoys protection of Matiang’i, and powerful Mombasa businessman Abu.

    His exit from the office was a sigh of relief for many workers in the coastal port whom at most times he made sweat.

    There have been complaints from disgruntled contractors who accuse him of awarding tenders to only those aligned to him and there are some times he subverts if he feels so. He’s been largely accused by those whom we talked to of running a powerful ring in the lucrative procurement department.

    Concerned sources speaking to Kenya Insights are calling upon EACC to conduct a lifestyle audit as we’re told he has amassed wealth beyond his pay grade and could have a lot of questions to answer.

    Corruption is rampant in KPA that’s not a secret, last year, the authority’s board had flagged stalled civil engineering projects to recover questionable funds in respect of rehabilitation of slipways, railways; rehabilitation of electrochemical workshop, rehabilitation of marine afloat workshops, rehabilitation of boat functions amongst other expenses with invoices totaling to Sh82.5M.

    However, it was determined that this had formed part of ongoing invoices totaling Sh 812.2M. Since some of the projects were affecting deliverables in the dockyard, the payments were partly okayed but was to be done on priority basis.

    In this respect, KPA engineers were to determine whether the prioritized projects had value for money before payments are made. Uncertified works amounted to Sh785M.

    The board also realized an overpayment of Sh380.8M from identified contractors and approved recovery.

    In a consultative meeting between the management including the GM infrastructure development, head of civil engineering and procurement, it was recommended that pending uncertified works amounting Sh785M was to be recertified and only those with value for money approved. Coincidentally, the same KPA engineers who had worked in certification for the same firms were also running the same exercise which left open many loopholes to manipulate them by similarly corrupt contractors.

    It was agreed that overpayment recovery be prioritized and no new works should be paid for until Sh380M is recovered.

    In an April 2021 internal memo signed by the Head of Civil Engineering, Eng. Samuel Mwaura, contract for mamufaction of concrete barriers and excavation and concreting of Makongeni goods yard was earmarked for recovery of the overpayment.

    Despite the board’s and committee’s recommendations of withholding further payments until overpayments are recovered and stalled projects fully completed, it emerged that new works were getting approved throwing questions on what the management was up to,  Eng. Mwaura was criticized for using the same KPA engineers for the cosmetic reevaluations while things remain the same. How could the head of civil engineering , head of procurement and supplies Cosmas Makori go against the committee’s directive not to approve more projects while the company was suffering loses in overpayment and stalled projects generating loses.

    Lobby groups in the dock wanted Makori investigated, he quickly went on a self imposed leave when rumors started to do around that EACC and DCI detectives would pounce on him.

    Our writer is aware of internal fights in the management and more so has to do with the control of the port and the lucrative Shimoni Port that comes with a good ground for kickbacks, the project has since been stalled following a court’s order. Will give more details on this in next article.

    Engineer Amadi’s transfer to Lamu we’re told didn’t go well with him as he deemed it as a demotion, the engineer is also married to Chief Registrar Atieno. Amadi’s stransfer was directed by Samatar.

    With MD John Mwangemi’s tenure coming to an end, there have been intensified fights fueled by succession politics.

    The endless suits, the publications on yellow magazines will give you more details on what’s really going on next.

  • Why Lobby Group Stopped Appointment Of Ambassador Mwangemi As New KPA Boss

    Why Lobby Group Stopped Appointment Of Ambassador Mwangemi As New KPA Boss

    The Kenya Ports Authority has suffered a blow after a court temporarily suspended the appointment of John Mwangemi as acting managing director.

    Justice Byram Ongaya of the Employment and Labour Relations Court in Mombasa issued the orders on Wednesday, effectively creating a leadership vacuum in the parastatal.

    The judge also certified as urgent the case that was filed by the Commission for Human Rights and Justice (CHRJ).

    Through its executive director Julius Ogogoh, the lobby group wants the appointment permanently annulled, arguing that it was made in secret and therefore violated the required recruitment process as provided for under the KPA Act and the Public Service Commission Act.

    He argues that under the KPA Act, the CS is supposed to make such an appointment in consultation with KPA’s board of directors.

    He also argues that the board, which was supposed to have consulted with Treasury Secretary Ukur Yatani before the appointment could be made, is not properly constituted.

    The term of the board chairperson and three other board members expired on June 5 this year.

    “He neither applied nor was shortlisted in the previous recruitment exercise that was done. The persons interviewed and shortlisted for appointment were rejected by Dr Yatani, who has arbitrarily and capriciously and secretively appointed Mr Mwangemi,” the petitioner said.

    Mr Ogogoh argues that the secretive appointment of Mr Mwangemi deprived the other qualified and eligible applicants and the greater Kenya public of an opportunity to serve.

    He said Kenyans were also denied their legitimate expectation of an open and fair recruitment process, and the right and opportunity to participate in the hiring process by applying for the position.

    Mr Mwangemi was appointed acting MD on July 1. He replaced Rashid Salim, who is on a three-month terminal leave ahead of his retirement in September.

    Mr Salim held the position in an acting capacity for more than one year following the abrupt resignation of Daniel Manduku over graft claims on March 28 last year.

    Political interference, vested interests and boardroom wars have derailed the hiring of a substantive chief.

    The names of nominees submitted to Dr Yatani after the last interviews were rejected for failing to meet the requirements.