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How wheeler dealers rake in billions after ‘change of guard’ in Kenya

theDealmakersThe entry of a new administration into Government has unleashed a new breed of lobbyists, wheeler dealers and brokers, all rushing for a share of lucrative supply contracts, tenders and big ticket state jobs.

Top on the list of Government contracts include supply of ICT services to its departments, provision of motor vehicle hire services, security services and gadgets, consultancy as well as supply of goods, works and services of all manner of nature, complexity and size.

With insider knowledge of how the public procurement system works, a litany of former bureaucrats and state officers including permanent secretaries, police chiefs and parastatal heads; have turned into wheeler-dealers and freelance brokers, linking all manner of briefcase operators to the state gravy train.

Only Dr Karanja Kibicho and Michael Kamau remain active in the civil service as permanent secretaries in the Ministry of Foreign Affairs and Transport and Infrastructure dockets respectively. While other former PSs in the Kibaki administration have joined politics either as Governors or Senators, a large number have gone into private business.

“The reason why top civil servants and bureaucrats leave government service and come back through the revolving door as lobbyists and brokers is because of weaknesses in the public procurement law,” Mwalimu Mati, head of the independent watchdog Mars Group, told Weekend Business in a phone interview.

Apart from weak laws that allow former civil servants to circumvent procedure, there is also an apparent lack of interest on the part of officials at the Public Procurement Oversight Authority (PPOA), anti-corruption agencies and the police to deal with this menace.

Legislation

“If the procurement rules are followed faithfully, then there should not be cases where former chief executive of a parastatal or former civil servant can influence who wins a tender of contract,” explained Mati.

In countries such as the USA, there are strict rules that prohibit former chief executives or state bureaucrats from having any dealings with the Government for a certain period through the ‘revolving door’ rule. This period of ‘cooling off’ prevent former state officers from influencing who gets which contracts and tenders and any breach is dealt with within the law. Actions taken include blacklisting those found to have undue influence on awarding of government tenders, jobs and contracts.

“In Kenya, there is no law to stop former bureaucrats from turning into wheeler dealers or lobbyists when they leave employment with the public service and that is why we have this systemic problem,” said Mati.

Cases of former civil servants using their privileged position and information to broker deals and obtain kickbacks usually go unnoticed due to lack of adequate laws against the practice.

Interest groups

“A case in point is the ongoing tussle at the law courts where interest groups are fighting for a share of lucrative deals, a position that pits the current administration against older networks of the forgone administration,” said Mati.

In most of the botched procurement deals, briefcase suppliers end up providing substandard or no deliveries at all. In some instances, the Government is sued for breach of contract and the matter ends up in the courts. Here, the courts give out huge awards and the amounts are shared among the masterminds of the deal.

Public procurement is a major area of corruption with available figures indicating that nearly 80 per cent of all cases before the Kenya Anti-Corruption Commission have a procurement element.

Corruption in procurement increases the cost of doing business, which in turn adds to the cost of public tenders and leads to poor standards of project work as contractors seek to recover the cost of their bribes.

The Public Procurement Oversight Authority (PPOA) was created in January 2007 when the Public Procurement and Disposal Act (PPDA) and associated regulations came into effect.

The Public Procurement System in Kenya has evolved from a crude system with no regulations to a legally regulated procurement system in line with International Standards.

Since the beginning of the millennium, Kenya has undertaken efforts to reform and modernize its Public Procurement System. The evolution was through a system regulated by Treasury Circulars in the 1970s, 80s and 90s and further to an orderly legally regulated procurement system since March 2001 under the Exchequer and Audit (Public Procurement) Regulations.

A report titled Development and Reform of the Kenyan Public Procurement System describes general weaknesses in Kenya as including insufficient implementation of laws and regulation in daily administrative actions, the culture of impunity and the wide spread culture of corruption.

-The Standard

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