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KenGen on spot over KES 52B fraudulent tender award

14 October 2015, 08:17 Samuel Kisika

Nairobi – The Kenya Electricity Generating Company Limited (KenGen) management is on spot for awarding a KES 52 billion tender to company it had initially disqualified over fake certificate documents and fraudulent contract accounts.

The KenGen CEO, Albert Mugo and his managers who appeared before the National Assembly’s Public Investment committee (PIC) had a hard time explaining why they contravened the procurement laws in tendering the lease to a regional bidder, Rentco East Africa Ltd, after vainly attempting to win another tender fraudulently.

The committee chaired by Eldas MP, Adan Keynan demanded to know from the Parastatal’s management why it opted for tendering of the lease under Public Procurement and Disposal Act rather than taking the Public Private Partnership approach putting in mind the lease period of 15 years.

“How did Rentco East Africa Limited qualify for the leasing contract less than a month after it was disqualified for the rehabilitation contract after the financial accounts submitted failed to match the company’s incorporation date?” questioned Kikuyu MP, Kimani Ichung’wa.

Read Also: Cash-strapped Kenya gov't borrows more from domestic market

The legislators demanded for the prosecution of the KenGen management following the managers’ revelation that the corporation will be paying KES 3.4 billion annually to a non-existent company.

“The directors of this company are not working for this company. They are licensed under other companies based in Kenya and United Kingdom.  This firm is not licensed to handle engineering consultancy. The particulars issued are fraudulent, as documented in the regret letter by the CEO,” said Keynan.

“How can the same management that disqualified this company go ahead and award another tender to it? Are we getting value for money and especially in the case of this major project?” he posed.

Aldai MP, Cornelius Serem took Mugo to task over the credibility of the entire procurement process and sought to know the cost to the taxpayer, taking into account the current exchange rate.

“It appears tenders are awarded to ‘briefcase’ companies that only exist in paper. No physical address for direction, and they lack capacity and competence to execute the job in question,” said Serem.

The committee raised concern that most multi-billion projects in the country end up to be fraud cases and demanded for stiffer penalties on officers implicated in the practice.

However, Mugo defended the corporation saying: “We are guaranteed of lease power plant to generate 58 mega watts of power. We only pay for what is generated.”

Mugo requested the committee to grant him two weeks to furnish the MPs with information on a number of questions he said their answers were demanding and thus needed more time to come up with a comprehensive response.

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