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KACC stops $14.9m port cranes deal, bars chief managers from flying out to Italy

Discussion in 'International Forum' started by BAK, Oct 9, 2007.

  1. BAK

    BAK JF-Expert Member

    Oct 9, 2007
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    KACC stops $14.9m port cranes deal, bars chief managers from flying out to Italy

    The beleaguered Kenya Anti-Corruption Commission (KACC) was stopping a Ksh1 billion ($14.92 million) deal at the port of Mombasa between the port authority and Italian manufacturing giant Reggiane Fantuzzi just days before President Mwai Kibaki declined to sign into law a Bill that have would seen it stripped of some of its powers.

    KACC, in a rare show of muscle, even barred the Kenya Ports Authority’s top officials — procurement manager Yobesh Oyaro and corporation secretary Muthoni Gatere — from flying to Italy last weekend to sign the contract for the crucial ship-to-gantry cranes, until investigations into the deal are completed and a decision made about its legitimacy.

    The travel ban was also extended to KPA managing director Abdalla Mwaruwa and technical services manager Joseph Atonga, but the pair were already out of the country, having left for the UK earlier to lobby for removal of a Vessel Delay Surcharge that was to be imposed on the port by international shipping lines over delays that are seeing ships take longer to turn around.

    The shipping lines have constantly complained that delays at the port are proving expensive for them, because of the downtime involved when the vessels idle at the port waiting for cargo to be unloaded, especially when they have containers destined for other ports.

    KACC warned the KPA top officials that if they dared defy the travel ban, despite having procured air tickets and allowances for the trip, they would be arrested.

    For the anti-graft agency, last week was particularly fortuitous as, just days after its crackdown on the KPA, parliament amended the Bill that President Kibaki declined to sign into law and which would have stripped KACC of some of its powers, including the power to investigate cases of corruption committed before it came into existence in May 2003.

    With the new amendments to the Statute Law (Miscellaneous Amendments) Bills 2007 passed by the House last Thursday, the anti-graft agency can now investigate economic crimes committed before it was created. But its quest for powers to prosecute was denied by parliament.

    Lack of power to prosecute cases has been a popular line of defence for KACC director Aaron Ringera, which he often raises at ill-tempered press briefings, whenever the performance of the anti-graft agency’s is questioned.

    Even KACC’s intelligence-gathering capacity is now being questioned, given the fact that its officers got wind of the controversy surrounding the cranes deal by sheer luck.

    Some junior KACC officers were training staff at Bandari College just over two weeks ago when they stumbled on an anonymous letter claiming that the government’s procurement procedures were flouted in the June 21 negotiation of the multimillion-shilling contract.

    They later came across a protest letter written by one of the losing bidders. But since officials on a training mission are not allowed to change roles and investigate crimes that they come across, they reported back to the anti-graft agency’s headquarters at Integrity Centre in Nairobi.

    A second team of investigators was then despatched to the port to question top managers over the manner in which the tender was handled and the circumstances under which the firm whose cranes are currently in use at the port was disqualified.

    Also being investigated is whether quality control measures required by procurement regulations were applied and why outside expertise was not sought for the exercise instead of the assignment being carried out by KPA’s own engineers.

    KACC spokesman, Nicholas Simani confirmed that the preliminary investigations had already been completed. “Our officers received the complaints and have carried out preliminary investigations into the deal; investigations are going on to ensure that the laid-down procedures and processes are adhered to,” he told The EastAfrican.

    Another issue in contention is whether there was a budgetary allocation for the tender, with an explanation by the KPA management that funds for the purchase would be sought from lenders said to be against the government’s procurement regulations, which bar state corporations from incurring debt without the Treasury’s permission.

    Apparently, the Authority could only raise Ksh880 million ($13.13 million) for the cranes, forcing it to seek the balance elsewhere — particularly as procurement regulation do not allow the spreading of financial commitments over more than one budgetary year.

    To get over the hurdle of financing the procurement of the cranes deal, KPA’s board was expected to meet in Nairobi and pass a resolution on seeking funding for the tender. But whether this happened by the time the deal was signed could not be independently confirmed.

    The process to procure the cranes has been plagued by difficulties, having started on December 14, 2006 and closed on April 5, 2007. It attracted four internationally respected gantry cranes manufacturers — Fantuzzi, Konecranes from Sweden, Kalmar Industries from Finland and Shanghai Zhenhua Port Machineries Company Ltd (ZPMC) from China, which has had a long relationship with the KPA.

    Kalmar withdrew before the shortlisting process started, citing pressure of delivery to other ports due to the huge orders it had.

    China’s ZPMC was considered a hot favourite, having supplied the cranes currently in use at the Kilindini port in 2005.

    Complaints that the cranes broke down frequently and were non-responsive to drives, festoon, spreader, limit switches and sensors surfaced as the three bids were subjected to technical evaluation.

    But why the shortcomings only surfaced when it was time for the KPA to acquire news cranes roused suspicion, fuelling speculation that it was the firm’s complaint that led to investigation at the port.

    This has raised questions over the integrity of the procurement process. If the cranes currently in the port are defective, why would the KPA use the same specification in procuring news ones? Or was it just a ploy to lock the Chinese out of the bidding process?