Kenya Insights

Tag: KPA tenders

  • Coast Business Leaders Demand Dissolution of KPA Board and Firing of Transport PS Gaghar Over Corruption Allegations

    Coast Business Leaders Demand Dissolution of KPA Board and Firing of Transport PS Gaghar Over Corruption Allegations

    Influential Coast businessmen petition President Ruto to dissolve Kenya Ports Authority board and dismiss Transport PS Mohamed Daghar amid explosive graft claims

    A powerful coalition of Coast region business leaders has issued an urgent petition to President William Ruto demanding the immediate dissolution of the Kenya Ports Authority (KPA) Board of Directors and the dismissal of Transport Principal Secretary Mohamed Daghar over serious corruption allegations that have rocked the country’s premier maritime gateway.

    The unprecedented call comes in the wake of explosive media exposés revealing a web of procurement fraud, insider trading, and systematic looting at KPA that has allegedly cost taxpayers billions of shillings through inflated contracts and irregular tenders.

    The Corruption Allegations

    The scandal centers on a multi-billion-shilling tender allegedly authorized by the Managing Director’s office, with whistleblower accounts and leaked documents pointing to extensive procurement malpractice that has compromised the integrity of one of Kenya’s most vital revenue-generating agencies.

    Among the most damaging allegations is a controversial KSh 200 million contract linked to board member Dr. Consolata Lusweti for painting stands at the Likoni Channel.

    Sources indicate the tender was awarded to a Somali businessman serving as a proxy, completely bypassing standard procurement procedures and delivering substandard results.

    Board Chairman Benjamin Dalu Tayari faces separate but equally serious allegations of facilitating corrupt networks through shell companies and questionable acquisition of a KSh 40 million luxury vehicle under circumstances that have raised red flags among investigators.

    Key Figures Under Scrutiny

    The corruption allegations implicate several high-ranking officials, including:

    • Benjamin Dalu Tayari – KPA Board Chairman and former Kinango MP, appointed in January 2023 for a three-year term
    • Mohamed Daghar – Principal Secretary for Transport, appointed in November 2022
    • Dr. Consolata Lusweti – Board Director, described as a close ally of Musalia Mudavadi with political ambitions for Kakamega’s Woman Representative seat
    • Lucas Maitha – Board member
    • Lawrence Kibet – Board member
    • Daniel Muriungi Mugao – Board member
    • Beatrice Nyamoita – Board member

    Business Community’s Response

    The petition has been spearheaded by prominent Coast businessmen including Mombasa businessman Athman Haroun Ismael, Kilifi’s Kenga Mrima, and Yatour Kirui, who have accused the KPA Board of lacking moral legitimacy and operating as a political reward scheme that undermines merit and professionalism.

    “We are appalled, but not surprised, by these revelations exposing the looting spree at KPA,” the business leaders stated in their petition. “We raised concerns in 2023 when the current board was appointed, and unfortunately, we’ve been vindicated. The government favoured tenderpreneurs over professionals.”

    The coalition argues that board members are exploiting their positions to build personal war chests ahead of future political campaigns, pointing to Lusweti’s public displays of wealth and ongoing political maneuvering by other members as evidence of their claims.

    KPA’s Response

    In response to the mounting allegations, KPA’s Corporate Communication Department issued a defensive statement saying: “KPA has taken note of recent media reports alleging irregularities in certain procurement processes within the organisation. These media reports do not reflect the facts or the operational standards of KPA.”

    However, the business community remains unconvinced by the denial, describing the board as a politically compromised entity with no genuine commitment to ethical leadership or port development.

    Call for Investigation

    The petitioners have called on Kenya’s key investigative agencies to launch immediate probes into the board’s conduct, specifically targeting:

    • Ethics and Anti-Corruption Commission (EACC)
    • Directorate of Criminal Investigations (DCI)
    • Asset Recovery Agency

    The EACC has previously taken action against KPA officials, including the arrest of a Senior Administrative Secretary over a KES 6.4 million tender conflict of interest case in July 2024.

    Historical Context

    The current scandal adds to KPA’s troubled history with corruption. In 2019, the DCI launched a probe into what investigators believed was a Ksh 2.7 billion tender scandal at KPA, implicating top officials including the then-Managing Director Daniel Manduku.

    Political Implications

    The corruption allegations come at a sensitive time for President Ruto’s administration, which has made the fight against corruption a key pillar of its governance agenda.

    The involvement of high-ranking officials from the Kenya Kwanza government, including Transport PS Mohamed Daghar, adds a political dimension to the scandal that could have broader implications for the administration’s credibility.

    Dr. Lusweti’s reported close ties to Musalia Mudavadi, a key figure in the Kenya Kwanza coalition, and her rumored political ambitions for the Kakamega Woman Representative seat, further complicate the political dynamics surrounding the scandal.

    The Stakes

    As one of East Africa’s largest ports and a critical gateway for international trade, KPA’s integrity is vital to Kenya’s economic prospects. The port handles the majority of cargo for landlocked countries including Uganda, South Sudan, eastern Democratic Republic of Congo, and Rwanda, making any disruption to its operations a regional concern.

    The business community’s petition represents more than just local frustration; it reflects broader concerns about governance standards in key state corporations and the potential impact of corruption on Kenya’s economic competitiveness.

    What’s Next

    President Ruto now faces mounting pressure to act decisively on the corruption allegations. The business leaders’ petition demanding complete dissolution of the KPA board represents one of the most direct challenges to his administration’s handling of corruption in state corporations.

    The president’s response will likely be seen as a test of his commitment to fighting corruption and could set a precedent for how similar allegations against other state corporations are handled in the future.

    As investigations continue and pressure mounts, the future of the embattled KPA board – and the broader integrity of the government’s anti-corruption drive – hangs in the balance. The coming weeks will be critical in determining whether President Ruto will accede to the demands for wholesale changes at one of Kenya’s most important state corporations.

     

  • KPA MD Ruto On The Spot Over Sh3B Tender Irregularly Awarded To Chinese Firm

    KPA MD Ruto On The Spot Over Sh3B Tender Irregularly Awarded To Chinese Firm

    Kenya Ports Authority (KPA) MD William Kipkemboi Ruto has found himself in the spotlight over a controversial Sh3 billion awarded to a Chinese firm.

    The tender in question TENDER NO: KPA/156/2023-24/TE- DESIGN, MANUFACTURE, SUPP. TENG AND COMMISSIONING OF TE (20) FULLY BUILT RUBBER TYRED GANTRY CRIMES 23 y/(RTG) had been put under investigation by Ethics and Anti – Corruption Commission (EACC) according to a letter seen by Kenya Insights addressed to the MD dated 23rd April.

    Despite the authority being aware of the situation, Mr. Ruto hurriedly awarded the tender on 26th, barely 72 hours later to M/s. Jiangsu Rainbow Industrial Equipment Co. Ltd disregarding the anti-corruption body’s warning.

    The actions of the MD to hurry the award is what had rose curiosity with suspicions that it could’ve been marred with corruption.

    In the letter seen by Kenya Insights, EACC informed the MD that it had received complaints about the particular and had receipts that it was marred with corruption and warned against breaking the law by awarding.

    “The Commission is in receipt of a report on allegation of corruption and malpractices in the tender process of the aforesaid tender currently ongoing at the Kenya Ports Authority. This is therefore to urge for the strict adherence to the Public Procurement and Asset Disposal Act, 2015 as well as other related laws that govern procurement and management of public resources.” Part of the letter read.

    Being an agent matter, the commission had requested the MD to supply it with vital tender documents to aid in the investigations. However, this was disregarded and Mr. Ruto went ahead and awarded the contract.

    EACC is the body mandated to conduct investigations on complaints touching on corruption, economic crime and unethical conduct.

    KPA has a concrete history of corruption and with no MD ever coming out of the waters unstained.

    President William Ruto a nemesis of the MD campaigned on a no corruption pledge and has on several occasions reiterated his stand of no tolerance for corruption.

    The dismissive step by the MD who also hails from the same Rift Valley region leaves a lot to desire with many who will now be keen to see which action the EACC will take given that it’s investigations has been ignored thereby undermining its authority.

  • 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.

  • Court halts Joho brothers plot to irregularly bag KPA tender

    Court halts Joho brothers plot to irregularly bag KPA tender

    Justice Reuben Nyakundi of the High Court has stopped Kenya Ports Authority from irregularly awarding a licence to Portside Freight Terminal Limited until a case filed against activist Okiyah Omtatah against the firm is heard and concluded.

    Omtatah accused KPA board of directors of going beyond the powers bestowed on them when they approved the licence to Portside Freight Terminal Ltd, a firm that belongs to Mombasa governor Hassan Joho and his brothers. Portside had won a multi-billion shillings tender to develop a second grain bulk handling facility at the port of Mombasa.

    Documents filed in court by Omtatah show that KPA wrote to the Treasury cabinet secretary Ukur Yatani on March 11 2021 asking for permission and approval to use single sourcing for the second grain handling tender and the request was approved by the board on June 28 2021.

    The contract wasthen awarded to Portside Freight Terminals Limited but six qualified  bidders including Mombasa Grain Terminals Limited, Kapa Oil Refinery, Kilindini Terminals Limited,  Africa Port & Terminals Ltd, Multiship International and Kipevu Inland Container EPZ were locked out after their proposals ignored.

    Activist Okiya Omtatah [p/courtesy]
    Omtatah convinced the court that single sourcing was exclusively being employed in this case to favor Portside Freight Terminal Ltd which feared competition from competent bidders. The activist also argued that the State Agency’s questionable move contravened the law and breached provisions of the Public Procurement and Asset Disposals Act.

    The board’s move also went against KPA’s Master Plan which proposed the second grain handling facility to be developed at either Dongo Kundu area or Lamu port but not Mombasa port where Joho brothers are are the shot callers.

    The ruling on Portside licence was celebrated by tycoon Mohammed Jaffer, Joho’s business rival who owns the only existing private grain handling facility ( Grain Bulk Handlers Limited) at the port of Mombasa and is poised to continue enjoying monopoly.

    The case whose hearing is set for August 27 has already elicited mixed reactions after another company associated with the Joho family took over a lucrative Nairobi SGR cargo terminal in Nairobi through an exclusive deal which raised eyebrows and attracted the attention of investigative agencies.