Integrity Centre in Nairobi which houses the Ethics and Anti Corruption Commission offices.
Former Sports PS Peter Kaberia and former Football Kenya Federation (FKF) chief Nick Mwendwa are among those the anti-corruption agency is after as it seeks to recover Sh220.4 million over irregularities in the award of a tender for preparations ahead of Kenya’s bid to stage the 2018 African Nations Championship (CHAN).
The Ethics and Anti-Corruption Commission (EACC) have moved to court seeking orders to recover the money from five former officials accused of violating procurement rules in a tender involving upgrade of sports facilities ahead of the continental showpiece.
The civil suit comes after the State withdrew a related criminal case. Aside from Mr Kaberia and Mr Mwendwa, the suit also targets Mr John Ruga (engineer sports Kenya and liaison person), Haron Komen (director administration at the Ministry of Sports), a Mr Isaac Okoth, and a French contractor Gregori International.
It involves the money paid to the French company in 2017 for upgrading of sports facilities ahead of Kenya’s failed bid to host the championship. The tournament was later moved to Morocco after Kenya failed to meet various requirements.
Former Sports Principal Secretary Peter Kaberia.
“Inspection was not done for the alleged work carried out by the contractor hence value for money not guaranteed,” the EACC said in its suit papers.
EACC alleges that the money was irregularly paid by the Sports Ministry to the foreign contractor in breach of procurement laws.
The court papers show that the amount was part of a contract worth Sh1.2 billion (€8,117,869) for the preparation of five stadiums and 10 training facilities for the CHAN 2018. The contract, dated September 14, 2017, involved designing, mobilisation, grass removal, irrigation, levelling, soil preparation and fertilisation, and installation of Bermuda/Pasalum grass and installation of equipment in five stadiums and 10 training centres, in preparation for the CHAN tournament.
Investigations found the Ministry applied direct procurement against the advice of Public Procurement Regulatory Authority (PPRA) and that the same was not reported to the PPRA within 14 days as required by the law.
Blank tender document
“There were no bills of quantities, blank tender document, detailed specifications, designs and drawings for the tender developed by the user department. The said bidder instead provided own specification, designs and drawing. No tender documents were prepared, no bid bond provided, no ad-hoc evaluation or negotiation committee was appointed and no professional opinion was rendered on the procurement process.”
Pending the determination of the case, the High Court has temporarily barred the Sports Department from paying Gregori International the contract sum or further implementing the deal. The defendants are expected to file their responses to the EACC’s bid.
Former Football Kenya Federation president Nick Mwendwa.
EACC alleges that the officials and the contractor violated procurement laws, leading to the irregular award of the tender.
It claims provisions of various laws, including the Anti-Corruption and Economic Crimes Act, the Public Procurement and Asset Disposal Act and the Public Finance Management Act, were breached in the process.
“The sixth defendant (Gregori International) was neither registered as a contractor with no accreditation by the National Construction Authority (NCA) and was thus not authorised to carry on the business of a contractor in Kenya,” EACC says in court.
It further alleges that the payments made to the company were not supported by the requisite and verifiable documents.
EACC maintains the money ought not to have been disbursed because the contract forming the basis of payments was tainted by corruption, irregularities, illegalities and fraudulent collusion between the defendants.
Foreign firm
Besides seeking a court order for recovery of the money, EACC has also applied for a declaration that the procurement of works and services related to the contract and award of the same by Mr Kaberia to the foreign firm was unconstitutional.
The suit is a culmination of an investigation by EACC into allegations of conflict of interest and unlawful acquisition of public funds from the Ministry.
EACC claims that there is possible loss of public money because the payment was allegedly not based on the value of work done.
"Inspection was not done for the alleged work carried out by the contractor hence value for money not guaranteed," the EACC said in its suit papers.
Its investigations found that the Ministry applied direct procurement against the advice of the Public Procurement Regulatory Authority (PPRA) and that the same was not reported to the PPRA within 14 days as required by the regulations.
"There were no bills of quantities, blank tender document, detailed specifications, designs and drawings for the tender developed by the user department. The said bidder instead provided own specification, designs and drawing. No tender documents were prepared, no bid bond provided, no ad-hoc evaluation or negotiation committee was appointed and no professional opinion was rendered on the procurement process," the investigators said.
Another key finding was that the advice and comments of the Attorney General on the contract between the Ministry and Gregori International was disregarded.
No due diligence
"There were no detailed cost estimates from Engineers (State Department for Public Works) or a market survey for the said tender to establish the bills of the items to be procured. No due diligence on legal, financial and technical capacity of the contractor to deliver was done.”
They added: "For instance, the company was issued with certificate of registration/compliance at Business Registration Service (BRS) on October 31, 2017 while the Ministry entered into contract with the company on September 14, 2017, way before it's registered in Kenya."
EACC states that the contract was skewed and unfair towards the ministry, as the advance payment was pegged on the signing of the contract, the payment schedule did not specify the deliverables or certified works on the side of the contractor.
It says another finding was that the Secretary of Works, State Department for Public Works was never supplied with tender documents, specifications, bill of quantities and annexures to the contract for project management.
Similarly, the dispute resolution clause in the contract did not provide independent Arbitration in case of any dispute before going to court. It provided for parties to negotiate between themselves of which if an amicable settlement has not been reached within 15 days, the same shall be referred to court.
The amount that EACC to recover was disbursed in two tranches, being an advance payment of Sh158.2 million paid to the contractor on December 2017 and another payment of Sh62 Million.
"There was no project implementation committee in place nor in inspection and acceptance committee as required under the law. The Public Works officials interviewed denied to have ever been involved in procurement, inspection, supervision or valuation of the said works," the documents indicate.
The suit is pending determination by the court.
