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Kibaki's administration pays out billions as election nears

Discussion in 'Kenyan News and Politics' started by Ab-Titchaz, Aug 22, 2012.

  1. Ab-Titchaz

    Ab-Titchaz Content Manager Staff Member

    #1
    Aug 22, 2012
    Joined: Jan 30, 2008
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    Jamaa anatafuta kujisafisha lakini yataka moyo maana maovu yake ikiwemo ufisadi wa hali ya juu, yako wazi mno hata hayawezi kufichika. These figures are mind boggling!!!...Soma zaidi.


    Kibaki administration pays out billions as election nears



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    Updated 7 hrs 0 mins ago
    By Alex Ndegwa

    Typical of Kenya's tradition when elections near, President Kibaki's administration is on a spending spree and the purpose of payments questionable and justification suspect.

    Consequently, the Controller of Budget wants the suspicious loan repayments in the region of billions of shillings, some funneled to ghost facilities, investigated.

    In the last financial year alone, Sh729 million was paid to service a loan borrowed in 1978 when President Kibaki was Finance minister to set up a fertiliser factory that was never built.

    Of the amount, Sh676 million was the principal and
    interest of Sh53.7 million, according to the 2011-2012 Budget Implementation Review Report by the office of Controller of Budget. Analysts argue that the KenRen project, given the exchange rates of those days, was of the magnitude of the Anglo Leasing and Goldenberg scandals over the last two decades.

    The figures are, however, only part payments for the dubious KenRen project, which parliamentary watchdog reports indicate
    will gobble in excess of Sh4 billion, most of it guzzled by interests over the last 34 years.

    Records from public debt department indicate KenRen account shall be fully paid in 2015, according to Controller of Budget, Agnes Odhiambo. This tallies with a 2007 House Public Accounts Committee report showing the last installment of Sh2.9 billion to a Belgium bank is scheduled on June 30, 2015.

    Earlier, Sh1.5 billion would have been paid to an Austrian bank on March 31, 2014. The total amount comes to Sh4.4 billion.
    This adds to irregular payments of Sh953 million the Government made for a computerisation project that stalled in 1993.

    PAC Chairman Boni Khalwale was incensed by payments made under President Kibaki's tenure as settlement for the abortive computerisation of the Customs and Excise Department in 1993 was detailed.

    "Former President Moi, who never went to London School of Economics (Kibaki is a graduate of the School) even refused to pay Kenren. That old man might have had a vision for this country," argued Dr Khalwale.

    PAC has recommended that Ethics and Anti-Corruption Commission (EACC) investigate the alleged loss of Sh1.8 billion in expensive short-term money printing contracts with De La Rue over which Transport minister Amos Kimunya is on a spot.

    The National Rainbow Coalition's administration in 2003 cancelled an expensive deal entered by the Kanu regime and set out to procure a competitive agreement.
    However, the competitive long-term deal was cancelled in 2006 in favour of expensive single-sourced multiple interim orders that PAC concluded ripped off the taxpayer.

    The wastage of public funds appears so blatant at a time the country is expected to tighten its belt to meet the huge expenses to sustain a devolved governance structure.

    Parliamentary Budget Office estimates the recurrent costs for the bi-cameral Parliament will increase from Sh6.6 billion to Sh14.3 billion.

    The cost of 47 new county legislatures is estimated at Sh22 billion. More expenditure arises from new constitutional order with the Controller of Budget reporting Sh3 billion was allocated last year, to cater for salaries and allowances for constitutional officeholders. The KenRen Chemical and Fertiliser Company has been the most intriguing because it was meant to benefit Kenyan farmers by saving them billions annually in reduced fertiliser import costs.

    Authorities, however, only entangled the country in a debt with financiers – Belgian (Ducroire) and Austrian (Bawag) banks – and the taxpayer was left footing the bills for the phantom project.


    Claimants

    Even more intriguing is that one of the claimants – Voist Ltd – was ordered by the international court to pay the Kenyan Government US$3 million after it lost its case.

    The PAC report indicated the company had failed to pay and the Government had not made any effort to enforce the court order, yet it continued paying other claimants.

    Parliament accused the Attorney General's office of conflict of interest and bungling of cases, which have seen the Government, slapped with hefty compensation packages.
    "The office having advised the Government to enter into these fraudulent contracts, lacked moral authority to represent the Government in court and arbitration of cases arising from the contracts," PAC team concluded.

    The Finance Ministry had in 1989 engaged CAL in the computerisation of the Customs and Excise Department, but the contractor delayed the project prompting the Government to halt payments. Eventually the project stalled in 1993, with the dispute ending up at the Chartered Institute of Arbitrators in London. The Government lost and had to fork out compensation and ex-gratia payments to the company.

    An Auditor General's report stated the poor handling of the project resulted in the Government incurring substantial unnecessary payments amounting to Sh953.2 million.
    Yet the value of the contract was UD$6.2 million (foreign component) and Sh103.2 million (local component) for the project, which was to be completed in 1991.


    Financial Secretary Mutua Kilaka last week told a PAC hearing an initial payment of Sh500 million was made to CAL. A further Sh202 million and interest of Sh23 million were paid on September 17, 2010, raising the total compensation to Sh726 million.

    It also emerged that the Government had overpaid CAL by some Sh200 million, which the pending bills closing committee recommended be recovered. The Controller of Budget has also raised the red flag on billions of shillings the Government has splashed on guaranteed loans.

    By the close of the 2011-2012 Financial Year, the Exchequer had forked out Sh1.9 billion for loans default, which could not account for how the funds were spent.

    Overdrafts

    Among them were Nairobi City Council (Sh82 million), Tana and Athi River Development Authority Sh500 million, and Kenya Broadcasting Corporation (Sh1.4 billion).

    "The Government continues to spend resources to repay these loans yet the funds were borrowed for commercial ventures," the report lamented. Apart from KenRen, in the fourth quarter report to Parliament, the Controller of Budget cites two other questionable loans "that were paid during the period under review which require further analysis and or investigation".

    They include pre-1997 outstanding loans arising from overdrafts amounting to Sh36.9 billion by various Government ministries in their respective accounts at the Central Bank. The report explains the Government converted the overdraft into a long-term debt in 2003 to meet statutory requirements.

    Cash flow constraints, however, forced the Government to suspend repayment of the debt. It resulted in an outstanding balance of Sh35.6 billion by 2007. In the last financial year Sh1.1 billion was paid out of the Consolidated Fund as principal for the loan, and Sh850 million as interest. The report recommends information on the ministries that received the advances should be availed.

    Another payment the Controller of Budget has questioned in last year's budget is Sh568 million with regard to an Italian debt swap.


    Standard Digital News : Kibaki administration pays out billions as election nears
     
  2. Ab-Titchaz

    Ab-Titchaz Content Manager Staff Member

    #2
    Aug 22, 2012
    Joined: Jan 30, 2008
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    Then we have the Anglo-Leasing ghost that never seems to go away but these guys are trying to show the 'success of the purchase' of a faulty boat with millions of Kenya's Taxpayers money. This ship has not even arrived in Kenya yet President Kibaki is going to launch it..mmmh?....:A S-confused1:


    Anglo-Leasing navy ship set for Kibaki launch



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    A Kenya Navy warship sails out of the Likoni channel to escort the MV Faina ship which was released by Somali pirates on February 8, 2009. Under a deal signed on July 15, 2003, Euromarine was contracted to deliver an oceanographic survey vessel to the Kenya Navy for close to Sh4.6 billion.


    In Summary



    • The ship will be launched nine years after the supply contract was signed and after years of controversy on being linked to a series of suspect security procurement scandals exposed by former Governance and Ethics permanent secretary John Githongo.
    • The Department of Defence contract with Euromarine Industries of Spain was listed by a number of reports as one of the 18 suspect security deals generally referred to as Anglo-Leasing scandals.
    • Fears have also been expressed that the vessel, which has been docked at a shipyard in Spain since 2005, was rusting away with most of its parts reportedly malfunctioning.


    A Sh4.6 billion Kenya Navy ship linked with the Anglo-Leasing scandals is set to be launched by President Kibaki after docking in Mombasa next week.

    An official at the Department of Defence on Tuesday evening confirmed to the Nation that the ship was expected in Mombasa and would be launched shortly after by the President.

    "Yes, I can confirm that the ship will arrive next week, most probably on Monday. It will be launched the same week," said the official.

    However, the source declined to divulge more details.

    The ship will be launched nine years after the supply contract was signed and after years of controversy on being linked to a series of suspect security procurement scandals exposed by former Governance and Ethics permanent secretary John Githongo. (READ: Government may have sunk more money into navy ship)

    The Department of Defence contract with Euromarine Industries of Spain was listed by a number of reports as one of the 18 suspect security deals generally referred to as Anglo-Leasing scandals.

    Under the deal signed on July 15, 2003, Euromarine was contracted to deliver an oceanographic survey vessel to the Kenya Navy for close to Sh4.6 billion.

    On the same day, two financing contracts were also entered into with two Spanish firms. At some point, Euromarine sub-contracted the ship's construction to another Spanish firm known as Astilleros Gondan.

    Suspicious deals

    However, payments for the contract were stopped in June 2005 after Mr Githongo blew the whistle on the suspicious financing deals.

    The supplier then sued the government for withholding payments for the vessel which was dubbed "Kenya's Spanish Armada" by former British High Commissioner Edward Clay.

    But the government resumed negotiations in September 2006 after the parliamentary Committee on Defence and Foreign Relations gave the contract a clean bill of health.

    The committee, then chaired by Mr GG Kariuki, had gone on a fact-finding mission in Spain and held meetings with the suppliers before preparing its report.

    Its findings, however, drew criticism from civil society groups, particularly anti-graft watchdog Mars Group led by Mr Mwalimu Mati.

    Previous damning reports on the deal included those prepared by the Controller and Auditor General (April 2006), the Parliamentary Accounts Committee (March 2006) and the Ministry of Justice and Constitutional Affairs (September 2006).

    A report tabled in April this year by the parliamentary Committee on Defence and Foreign Relations showed that the Treasury had provided €10.2 million (Sh1.2 billion) in the Supplementary Budget as part of the terms of settlement agreement between the government of Kenya and suppliers, Euromarine.

    The committee, chaired by Wajir West MP Adan Keynan, said the remaining balance of €26.9 million (Sh2.8 billion) would be provided for in the financial year 2012/13 budget.

    "The withheld payments also generated political pressure on the Treasury, including, according to Githongo's report to President Kibaki of November 2005, direct requests to him by two ministers," says a Mars Group report published in 2007.

    Anglo-Leasing navy ship set for Kibaki launch- News|nation.co.ke
     
  3. Ab-Titchaz

    Ab-Titchaz Content Manager Staff Member

    #3
    Aug 22, 2012
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  4. Sikonge

    Sikonge JF-Expert Member

    #4
    Aug 22, 2012
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    POLENI SANA.

    Ila wenzetu walau mnapumua. Sisi huku Tanzania ni CHOKA MBAYA.
     
  5. Ab-Titchaz

    Ab-Titchaz Content Manager Staff Member

    #5
    Aug 22, 2012
    Joined: Jan 30, 2008
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    Vichekesho vya hii skendo ya meli vinazidi kuonekana kupitia picha za mtandaoni baada ya ripoti kutoka Mars group.

    Kenya wameuziwa meli zilizochoka na kupakwa rangi kisha wanaziita eti Navy Warships!...Kazi ipo na hii serikali ya
    Mzee Kibaki.

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    The KNS Jasiri at a Spanish port, where it has docked for years.

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    The Kenya shield clearly indicates the true ownership of this vessel.

    A Kenyan news blog has obtained exclusive photos of a controversial Kenya Navy vessel rotting away in Spain while Somali pirates threaten the port of Mombasa.The KNS Jasiri, valued at over Shs4.1 billion (US$52 million), cannot be delivered because of a contractual dispute between the Kenya government and the ship's builder.

    Exclusive photos: Kenya Navy ship rotting in Spain « The Nairobi Chronicle


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