Kenya Insights

Tag: KPA

  • 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.

  • KPA HR Manager’s Secret Contract Renewal Brews Controversy

    KPA HR Manager’s Secret Contract Renewal Brews Controversy

    Sources at the Kenya Ports Authority indicate that a section of conniving board of directors have secretly approved the renewal of contract of the General Manager, Human Resources & Administration, Mr. Daniel Odhiambo Ogutu for five years, an issue that is causing jitters.

    Mr. Ogutu is on a three-year contract which comes to an end in May this year.

    According to reports, the KPA board’s labour committee which sat recently, approved Mr. Ogutu’s request for another five years. Sources say, the issue is awaiting a full board for ratification.

    The requested extension has angered workers who have been waiting for Ogutu to exit, blaming him for orchestrating persecution of employees on flimsy grounds abs introduction of punitive rules including capping of overtime allowances.

    A few months ago, port employees had threatened to down their tools to push for Ogutu’s removal. However, the strike was later called off after they were persuaded to hold on as his contract was at its end.

    KPA Human Resource and Administrative General Manager Daniel Ogutu.

    ”It is unbelievable KPA board could sit and review Ogutu’s contract without subjecting him to performance appraisal among other factors. Since he took over, nearly 100 employees have rushed to labour and relations court for protection over unfair dismissals. The outcome of the rulings have seen KPA incurring heavy loses,” an employee said.

    It is claimed Ogutu’s contract extension was being pushed through the intervention of Raila Odinga who reportedly spoke to Treasury CS Ukur Yattani to assist him by talking to the KPA board.

    Instructively, there has evolved a powerful cartel controlling KPA operations from the ministry of National Treasury same as it used to be when the Mombasa Port was under the Ministry of Transport.

    The cartel is said to have ensured KPA has no full board chairman for over 20 months to make manipulation of issues and deals easier for them. There are also two vacancies of directors which have remained unfilled to limit the quorum.

    At the moment, KPA General Manager Infrastructure Development is said to be the favorite of the National Treasury cartel. It is said that Sidai has been advised not to resign to contest for the Busia’s governor’s seat and instead wait ti take over as acting MD when John Mwangemi exits in April. Sidai, Ogutu and Mwangemi are also drinking buddies.

    Last December, KPA Board members were summoned and ordered to make a hurried resolution approving the transfer of the control of the second container terminal also known as CT2 to the moribund Kenya National Shipping Line.

    The KNSL is under the control of Mediterranean Shipping Company(MSC). The deal being pushed by a powerful politician is aimed at using the moribund KNSL to fraudulently acquire the most profitable part of KPA before the General Elections. The said politician’s family owns shares through another firm in KNSL.

    The cartels who have reportedly been promised handsome rewards if they successfully accomplish the transfer of CT2 to MSC even without competitive procurement process, are said to have threatened some KPA Board members who questioned the illegalities of the proposed privatization.

    Issues such as concession fees, service level agreements, investment benchmarks, throughput fees and performance are being hidden from the public in the CT2 secret deal.

  • KPA Risks Losing Sh1.3B As Officials Go Against Board’s Decision For Overpayment Recovery

    KPA Risks Losing Sh1.3B As Officials Go Against Board’s Decision For Overpayment Recovery

    The more things change, the more they remain the same and getting the monkey to a different forest doesn’t change its behaviors. Kenya Ports Authority, one of the most powerful parastatals in the country and most sort after by hungry wolves given them attractive lucrative deals it comes with is not new to scandals.

    Here men fight sweat and blood to win strategic positions in controlling the operations and finances of the port. There’s almost no single senior official from the MDs in the past decade who has gone through the wire unscathed, it’s the seabed of corruption.

    Due to rampant corruption, the state firm in tight grip of cartels has steadily been making avoidable loses.

    In a March memo seen by Kenya Insights, 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 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 has now emerged that new works are getting approved throwing questions on what the management could be upto,  Eng. Mwaura has been criticized for using the same KPA engineers for the cosmetic reevaluations while things remain the same. How can 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 is suffering loses in overpayment and stalled projects generating loses.

    Makori who’s currently on self induced leave, is a man under scrutiny with lobby groups in the dock now asking the DCI and EACC to initiate an investigative review of the running of the port as more could be brewing in the already dirty pot of the port. It becomes a grand issue when state officials fail to protect public funds from being misused and lost to dubious deals and contractors.

    As seen in other failed corporations, rogue state officials tend to cut deals with equally rogue contractors and rip off the public funds.

  • 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.

     

  • Treasury Disowns Corrupt Manduku In Sh2.7 Billion Case

    Treasury Disowns Corrupt Manduku In Sh2.7 Billion Case

    Ukir Yattani led National Treasury has said the expenditure was made without its authorisation leaving the corrupt KPA Boss Daniel Manduku on the frying pan in the fraudulent tenders worth Sh2.7 billion.

    In a letter dated November 22, 2019, the Treasury says the money was spent before approval of the supplementary budget.

    “The Cabinet secretary Ministry of Transport and Infrastructure was to grant approval for the request and subsequently seek the concurrence of the National Treasury … there was no prior approval for Kenya Ports Authority management to procure … before approval of supplementary budget 2018/19 FY,” Principal Secretary Julius Muia says in the letter.

    In a case that will be heard later on today,  Tuesday 3rd, KPA Managing Director Daniel Manduku has moved to the High Court seeking anticipatory bail. Manduku also wants the court to dismiss DCI probe terming them as unlawful and illegal.

    Manduku says that DCI has overstepped its mandate by investigating matters that should be investigated by EACC and wants the court to stop the DPP from bringing charges against him based on an investigative report and recommendations by the DCI. Justice Erick Ogola of the High Court in Mombasa will rule on the matter today.

    The KPA officials had in a letter dated January 30, 2019 sought the approval of Treasury to shift Sh2.5 billion of the Sh3 billion previously set aside for buying a piece of land at the Inland Container Depot in Nairobi and use Sh500 million to concrete the Makongeni yard and Sh2 billion for dredging the port.

    Dr Muia said that the budget was subjected to rationalisation and a recommendation for approval was only given on September 24, 2019. By this time, Dr Manduku had already awarded the tenders and paid for the Makongeni works. This was done without knowledge of the Treasury.

    Audit records indicated that nine contractors were given the tender. The tender was split in smaller portions to duck legal requirements for tendering for capital projects. The corrupt Maduku—who has links with DP Ruto awarded  his crony contractors the tender masked as repair works.

     

  • Corrupt KPA Boss Daniel Manduku And Management Questioned By DCI

    Corrupt KPA Boss Daniel Manduku And Management Questioned By DCI

    Kinoti led DCI detectives yesterday questioned the corrupt senior Kenya Ports Authority (KPA) officials. Manduku lead management differed with junior KPA board members on the approval of multimillion tenders that have seen coffers lose billions setting a stage where arrests of KPA officials are eminent.

    Last week, DCI handed over the files implicating KPA boss Manduku to massive graft at the authority to Haji led ODPP.

    “The file was handed over to me. We are looking at it and if satisfied as ODPP we will proceed,” Mr Haji said.

    Yesterday, Monday, all KPA Board members were summoned at the DCI Headquarters for questioning in a probe of flawed tenders worth sh2.7 billion. Board chair Joseph Kibwana was the only one absent.

    The DCI probe revealed differences between the board and corrupt managing director and DP Ruto’s alleged ally Daniel Manduku emerged after he claimed that his signatures were forged.

    Kenya Railways Corporation MD Philip Mainga was also quizzed over the Makongeni yard, which KPA had intended to buy but the deal never materialised yet KPA went ahead used  Sh500 million—from ICDN funds—for the development of the same yard.

    Those on the DCI’s radar are Dr Daniel Manduku, operations general manager William Rutto, senior works officer Anthony Muhanji, principal civil engineer Bernard Nyobange and works officer Juma Chigulu.

    In May this year, EACC and DCI launched inquiries over the fraudulent awarding of a Sh40 billion Kipevu Oil Terminal project. According to the investigative agencies, the tender was awarded to a blacklisted Chinese firm in October 2018.

     

     

  • DCI Forwards Dan Manduku’s And Other Corrupt KPA Officials Investigation Files To ODPP

    DCI Forwards Dan Manduku’s And Other Corrupt KPA Officials Investigation Files To ODPP

    DP Ruto’s ally and KPA MD Daniel Manduku whose phone remains switched off most of the time is a panicked man who knows his days are numbered as DCI hands over three investigations files to ODPP.

    Embattled Daniel Manduku reported to the office over a year and four months ago as Acting Managing Director. For the few months he has been at the top, Manduku has engaged in massive fraud and impunity, just like his buddy—number two.

    Yesterday, Yusuf Hajji led Office of the Director of Public Prosecutions confirmed to have received and scrutinised three investigation files against top KPA managers, whose arrests are imminent over Sh2.7 billion tender fraud, from George Kinoti led Directorate of Criminal Investigations (DCI).

    DCI handed over three files that covered a probe report about the Makongeni Goodshed Project, Construction of concrete barriers and the revitalization of the Kisumu port that the President is set to launch.

    “The file was handed over to me yesterday…we are looking at it and if satisfied as ODPP we will proceed,” DPP Noordin Haji told said.

    Embattled KPA Managing Director Daniel Manduku is at the centre of all the investigations. The soft-spoken cartel who is now facing over 30 lawsuits of corruption and abuse of offices is alleged to have authorised irregular expenditure amounting to Sh2.7 Billion for the three projects. Why is he a free man in the first place when everything has been laid out that he’s a competent looter?

    DCI’s anti-graft radar has also picked KPA General Manager in charge of Operations William Rutto, Senior Works Officer Anthony Muhanji, Works Officer Juma Chigulu and Principal Works Officer Bernard Nyobange as confederates.

    According to DCI’s report, Manduku masterminded alongside the said officials the division of 2100 square meters yard belonging to Kenya Railways into 9 zones and fraudulently awarded 8 contractors the concrete works that costed the taxpayer Sh506 million.

    DCI probe also revealed that all 8 companies, believe to be runned by Manduku and cronies, were paid in full without completing tender. Also, the sleuths note that no job was done on the ground as Kenya Railways reclaimed its land and demolished the few concrete they had laid to bluff the public.

    The KPA management whose arrests warrants might soon if not already by now has, in their rebuttal, rubbished DCI’s investigations stating that no land was reclaimed and they gazetted the acquisition of the property from Kenya Railways.

    MD Manduku.

    A few days ago, Manduku and Former KPA MD Catherine Mturi-Wairi banks accounts were frozen after requests by the office of DPP Noordin Haji. This is after suspicious monies were traced to their accounts.

    Manduku, who is DP Ruto’s proxy has been attempting to bribe detectives to go slow on him but as it has to be, the fall of everyone linked to DP Ruto is inevitable.

    A few weeks ago, the arrogant KPA boss told a journalist to write what they wished after the journalist sought for comment about some scams at the scandal-ridden authority. Now, the trembling Manduku is begging media not to expose the scams further after he felt the heat and stupidity of his reckless remarks.

     

  • Blow To KPA As High Court Halts The Auction Of Pension Scheme Properties

    Blow To KPA As High Court Halts The Auction Of Pension Scheme Properties

    More than 2000 members from Mombasa and Nairobi had filed a suit before the Mombasa High Court Justice PJ Otieno seeking orders to debar trustees of the Kenya Ports Authority Pension Scheme (KPAPS) from transferring management of its multimillion assets worth to Private Real Estate Agents and the planned backdoor sale of KPAPS houses.

    Reprieve to members as Lady Justice Dorah Chepkwony stopped the scheme’s trustees from selling prime properties, movable and immovable assets of KPA, including houses.

    “Pending the reference of the matter to arbitration and hearing and determination, a temporary injunction is hereby issued restraining defendants from transferring, alienating, disposing either by public or private treaty the prime properties both movable and immovable assets of KPA pension scheme including houses,” said Justice Chepkwony.

    Lady Justice Dorah Chepkwony stated that the matter should be referred to arbitration in terms of Clause 27 of the Trust Deed and Regulation of KPA pension scheme. Lady Justice Chepkwony was issuing an order in the case filed by Bwana Mohamed Bwana, a pensioner who was seeking to stop KPA from selling his house in Nyali.

    This cames at a time when more than 2,000 KPA staff members from Mombasa and Nairobi under the scheme had also petitioned the High Court to issue similar orders stopping the KPA-registered trustees from selling their houses to outsiders through Property Agents.

    On the 4th of May this year, the scheme directors were preparing to complete the deal with Kikambala Development company when KPA’s Board and Legal Services General Manager Catherine Muthoni Gatere rushed to court and stopped the transaction the next day.

    “The said purported agreement for sale is not signed by all trustees as is required by the provisions of the Trust Deed. Neither is it sealed with the common seal of the scheme, which is still in my possession in my office,” she said before Justice Mathew Anyara Emukule.

    Pension chairman Harry John Paul Arigi signed an affidavit saying members elected him to protect their interests, hence he has the power to manage it exclusively and independently without any interference from KPA.

    The pensioners said registered trustees had advertised for sale of all KPA pension scheme houses stating that the pension scheme took over the management of various houses namely Dedan Kimathi, Nyali, Kizingo, Nairobi, Mwembe Tayari, Mbaraki, Bamburi and others in Nairobi following non-remittance of monies to the scheme by the authority.

    “Arising from the agreement, therefore, the scheme assumed the ownership of the property with the staff in occupation becoming its tenants,” read the signatories’ letter to the management.

  • KPA MD Manduku Swallowed In A Sh6B Tender Scandal

    KPA MD Manduku Swallowed In A Sh6B Tender Scandal

    Kenya Ports Authority has lost over sh6 billion in the past one year and DCI sleuths are on their necks.

    According to DCI, the rehabilitation of Kisumu Port has seen the coffer lose sh2.5 billion.

    On August 22, Transport and Infrastructure Cabinet Secretary James Macharia wrote to Director of Criminal Investigations (DCI) George Kinoti asking him to commence investigations in to the allegations of fraud at the parastatal.

    DCI director would later on August 29, write back to the CS complaining that his detectives are being frustrated by top Port officials.

    DCI director through a letter, he recommended the CS to take administrative measures that will see top KPA officials removed from the office since they are suspected of hoarding documents and intimidating potential witnesses.

    In the letter from DCI to the CS, Kinoti singled out KPA managing director Daniel Manduku, who was appointed to the position barely eight months ago, for interfering with exhibits and witnesses.

    “The allegations disclose wide-ranging fraud and theft running into colossal amounts,” said Mr Kinoti in his letter to CS Macharia.

    CS Macharia will, according to the letter from DCI, now be forced to instruct the board of KPA, whose chairman is the former Chief of Kenya Defence Forces Gen (Rtd) Joseph Kibwana, to make sure Dr Manduku and other top managers are off from their posts.

    Dr Manduku is not the only one on the frying pot, investigators have also demanded that six other top managers at the institution be forced to step aside because other than being prime suspects, they occupy offices in which critical evidential material are domiciled.

    Dr Manduku, an architect by profession was appointed head KPA in May in acting capacity after Ms Catherine Mturi-Wairi was sacked over inefficiencies at the port.

    Before the appointment, Dr Manduku was the CEO of the National Construction Authority (NCA). He was confirmed to the post in November amidst protests by the local community that one of their own should have replaced Ms Mturi-Wairi.

    “The Managing Director has scheduled a meeting with all Heads of Divisions and Heads of Department on Monday September 9, at 7:30 am at the New Conference room,” read the email from his PA Maureen Kimani.

    According to media sources, the genesis of Dr Manduku’s trouble is the rehabilitation of the Kisumu Port which began in May at a projected cost of Sh3 billion.

    According to Raila Odinga, the brains behind the rehabilitation of the port, the project is expected to increase maritime business and travels between the East African Community member countries as well as uplift the stature of Kisumu City.

    So far, President Uhuru Kenyatta has toured the port 3times indicating that the project has high political pillars involved in and the impromptu tours could have been the eye opener to possible graft that could taking place in the project.

    According to media sources who accompanied the President during his last impromptu visit to the project on July 6, while on his way back from a private visit to Tanzanian President John Magufuli, stated that President Kenyatta took issue with the slow pace and ordered the engineers on site to ensure the work is finished by August.

    Journalists were locked out of the tour in which the President held a 30-minute closed-door meeting with engineers from Kenya Navy and officials from the KPA and Kenya Railways Corporation.

    At some point, according to media sources, President cussed Dr Manduku for the slow pace of works and what he saw as needlessly high cost of some of the rehabilitation works being undertaken at the port facility.

    “He was surprised when he heard that KPA had budgeted Sh2.5 billion for concrete works yet the contractors told him they were to be paid Sh600 million for the whole project,” a media source who was in the private meeting said.

    The President then directed the NYS, Kenya Navy and the Kenya Prisons to take control of the project.

    After which, The revised budget by NYS for the concrete works came to Sh120 million.

    “I want to tell you that even those of you here at the port, we are monitoring and watching. We know the money you wanted to spend there and the amount we have spent, as well as the amount you intended to spend,” President said.

    Inflation of bills of quantities for concrete and electrical works is one of the biggest corruption conduits at KPA. One of the KPA general managers has thrice brought up the issue in the executive committee meetings but has been dismissed offhand, according to media sources.

    DCI is also investigating concrete works running into over Sh1 billion at a yard in Nairobi’s Makongeni area. KPA wanted to lease the yard from Kenya Railways for expansion but KPA proceeded to spend colossal money on it even before the lease could be agreed upon.

    On Thursday, Kenya Railways acting Managing Director Philip Mainga, while recording statements with the investigators, denied ever leasing the yard to KPA.

    “Kenya Railways has told us there was a discussion to lease the property to KPA but that process hasn’t taken place yet. So it would appear KPA managers were just looking for ways of spending money. It’s a scandal of monumental proportions,” a source in the investigations team told the media.

    In his fiery speech in Mombasa last week, the President took a swipe at top port officials for frustrating his signature project, the Standard Gauge Railway, by starving it of cargo business.

    According to the media, KPA officers were slowing down the clearance of cargo in order to create an artificial congestion so that containers being offloaded from ships can be diverted to Container Freight Stations in Mombasa, which are owned by a few wealthy cartels.

    “We know what you are planning — slow down things so that the cargo goes elsewhere,” the President said.

    KRA has been complaining of dipping revenues at the port in recent times and on Friday Acting Finance CS Ukur Yattani and KRA Commissioner General Githii Mburu addressed the KPA management over the issue.

    Investigators from DCI will also be probing why KPA, which is one of the most profitable parastatals in the country, overran its budget by Sh2.3 billion in the 2018/2019 financial year, without the approval of the board.

    DCI was tipped off by board members that so far KPA has overran its first-quarter budget by Sh800 million.

    Dr Manduku’s tribulations were compounded by a whistleblower within KPA who wrote to investigative authorities about alleged plunder at the institution, ostensibly at the behest of the MD.

    On July 16, Mr Joseph Patterson Okakho, who was the former acting head of ethics and integrity at KPA, wrote to DCI Director detailing his tribulations at the hands of Dr Manduku after he queried the integrity of a number of contracts awarded by the company.

    “Briefly, problems started in May 2018 after Dr Manduku took over as acting Managing Director at the Kenya Ports Authority,” said Mr Okakho in his 18-page statement.

    According to the whistleblower, as soon after the MD was appointed, former Transport Principal Secretary Prof Paul Maringa instructed him to quickly bring Dr Manduku up to speed on the importance of corruption prevention at KPA.

    “My encounter with the acting CEO was very brief – less than two minutes. I had organised a briefing of 20 minutes, but he only gave me less than two and showed little interest in anti corruption,” Akakho said.

    In the letter, Okhako said his open work led to his falling-out with Dr. Manduku who punished him for leaking company secrets by first demoting him and transferring him to the Kisumu Inland Container Depot as principal officer.

    He said he detected a breach of policies and regulations as early as the July-to-November 2018 quoting one instance, that is, in October 2018 he declined a training programme on procurement suggested by private consultants and which the MD had approved.

    “This would have cost between Sh12 million and Sh14 million in travel expenses, accommodation and tuition fees for over 64 members of staff, “said Mr Okako.

    He added that the training had not been budgeted for by KPA and was not captured in the KRA training needs analysis.

    Okako stated that he did not have peace as the head of ethics and integrity since then and was allegedly accused of sharing information with the DCI and the anti-corruption agency.

    “These accusations…started immediately after I intervened and stopped that particular training expenditure. MD became very uncomfortable with me.” Okako said.

    Okako said that he set meetings with board chairman Gen (Rtd) Kibwana to register his concerns over the CEO’s disinterest in corruption prevention.

    “However, I did not get any help from the chairman of the Board despite many questions I raised with him,” he said.

    Okako has raised queries on 12 projects that KPA was undertaking but which he thought had not followed the law. Mostly, he was not given answers and this set him on a collision course with Dr. Manduku.

    The manufacturing of 10,000 block barriers at a cost of more than Sh650 million is one of the projects in question. The tender was awarded to seven companies, and each was supposed to supply 1,380 barriers each at a cost of Sh94 million.

    “The question is why so many barriers? What are they for? Where are we going to use all these barriers? If we wanted all those barriers, why did we split the tender?” Mr Okakho posed in his statement to the police.

    In a letter to DCI Kinoti dated August 19, Mr Okakho said the MD had personally threatened him with dismissal if he continued giving information to investigative agencies.

    “On August 12, I got a WhatsApp call from the MD himself. The call was short and threatening

    “…..what is this report I hear you filed with DCI and EACC? …..I don’t want to hear about reports being made outside KPA…, you stop what you are doing or I will have you sacked.” Okakho said

    Two days later, Mr Okakho was called to appear before a disciplinary committee over his alleged misuse of social media platforms.

    Mr Okakho declined to attend the disciplinary hearing and instead appealed to the DCI for protection, which prompted Mr Kinoti to write to CS Macharia to take administrative action against Dr Manduku and other senior officials.

  • How The Tax Evasion Racket And Foreign Stolen Cars Cartel Works In Mombasa With KPA, KRA Officials

    How The Tax Evasion Racket And Foreign Stolen Cars Cartel Works In Mombasa With KPA, KRA Officials

    By Nicholas Olambo
    The entire month of October has been declared a taxpayers’ month to appreciate every hustler paying the taxman his dues. As KRA (Kenya Revenue Authority) runs this month long futile PR exercise, its rogue officials, cartels and rogue port officials are in bed.

    Just yesterday KRA officers impounded two Range Rovers disguised as clothes. As usual, the two high-end cars and six hundred bicycles in a 40ft container were from the UK and destined to Uganda. As usual, they were not declared in an attempt to evade tax. This dirty business is booming under the watch of KRA and may not stop any soon because KRA’s senior officials and government officials are the major beneficiaries.
    It’s no longer news that there is a string of cartels that collude with KPA (Kenya Ports Authority) and KRA officials to import big cars into the country fraudulently as goods on transit and evading tax and duty payments in the process. Not long ago, KRA recalled over 120 vehicles which were illegally imported by cartels in Uganda and Britain.

    These vehicles that were declared as transit goods to Uganda but ended up in the local market have outstanding tax issues. It’s not a new trend; KRA has been sleeping on the job failing to hit its tax collection target because of its rogue officials who foster these crimes are never seriously brought to book.

    George opanga is a KRA official known to be colluding with the cartels, operating alongside businessman Elijah Girimani, these two have been behind a conspiracy to evade tax by procuring uncustomed goods and George fraudulently messing up with KRA’s Simba online system. They are being put in and out of custody, delaying justice because they have ‘stolen’ enough to hire canning lawyers.

    The courts are also big obstacles to bringing these criminals to face justice through serious punishment. KRA is on record pleading with the courts to deny the accused bails as they are flighted risks and their associates are being tracked by investigators.
    They are the brains behind the importation of stolen luxurious cars, registration without payment of requisite tax like they did in July in respect to a Range Rover at JKIA customs warehouse. The dirty deal saw the taxman lose over six million shillings.

    Girimani who denies all the charges brought against him is one unscrupulous businessman who procured uncustomed goods having knowledge that import duty amounting to over Shs 4.5 million had not been deposited at National Transport and Safety Authority offices in Upper Hill.

    Officials that cause the taxman these millions of losses are simply arraigned in court then given small bails, literally some mean cash that they pay and walk free. KRA staffers, Benard Ong’ayo, Nicholas Ambala and Fredrick Mwendia have been charged with conspiracy to evade payment of duty.

    The racket that was launched in February is lenient, failing to net the cartels. They continue to operate as anonymous because some of them or their clients are high and mighty in the government. Water CS Eugene Wamalwa is a known beneficiary/ victim of the complicated KRA tax evasion syndicate.

    His Range Rover that was that was deregistered was among the over 120 vehicles that were recalled by the tax agency. A whole cabinet minister who should be leading by example had his luxurious car, Range Rover V8 model (made in 2015) operating with a fake plate belonging to an Isuzu truck.

    Vehicles stolen in the United Kingdom find their way into the Kenyan market through these dirty deals, Eugene’s Range was imported as house hold goods, in fact, cushions and couches. Nothing has been done to him. The lame excuse is blamed on faceless cartels as KRA hides in the desperate statement that some buyers are innocent customers. They simply lack guts to go for the big fish.

    Tax evasion is a serious crime but the taxman only works round the clock to fleece the straining Kenyan any penny in his pocket. Now they are targeting to tax the shs 200 you send to your mother or your girlfriend via M-pesa and leaving the war on cartels unfinished. They claim to be interested in playbills/ till numbers.

    M-pesa is registered, and the records are there to show all the transactions, KRA should go for the banks like Equity staff stationed in Namanga and other suspected banks like Cooperative Bank of Kenya, Commercial Bank of Africa and National Bank of Kenya that collude with cartels. Clearing and Forwarding firms and people in business like Anthony Maingi of Helix Company and Nelson Mugo Mwanzia of Excess Luggage Ltd for fraudulently conspiring or evading tax and duty payments.