Government says it will not bail out NCPB in Sh550m row
Permanent Secretary in the Ministry of Agriculture, Dr Romano Kiome during a past event. Photo/FILE
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Agriculture Permanent Secretary said the contract for the supply of the grain was “not professionally done
The government on Monday insisted it will not pay a court award to a supplier, which has seen the National Cereals and Produce Board (NCPB) bank accounts frozen. Agriculture Permanent Secretary, Romano Kiome, told Parliament’s Public Investment Committee (PIC) that the Sh550 million award to Erad Suppliers and General Contractors was fraudulent.
“Our position is that come what may, we will not pay for nothing delivered. We have moved to the Court of Appeal to contest an arbitration award against the board,” Dr Kiome said.
Dr Kiome said the contract for the supply of the grain was “not professionally done from the beginning.”
“The way that transaction was done is as if there were interested parties. When Erad was seeking a breach of contract from NCPB at the arbitration, the contract had not proceeded because the supplier had no capacity to deliver the maize,” he said.
Lamek Achika, the manager in charge of audit at the Kenya National Audit Office (KENAO), revealed that Erad Suppliers was awarded the contract when it had a bank overdraft of Sh3 million and owed its suppliers a further Sh7 million.
“This company could not according to minutes of the board’s technical evaluation supply the maize. But it was cleared to supply the same under mysterious circumstances,” he said.
The committee also heard how former deputym chief justice Nancy Baraza, who was representing Erad Suppliers and General Contractors Limited, approached NCPB’s lawyer to drop the case after the arbitrator awarded the supplier Sh550 million.
“She sent me text messages, which I reported to the CID, asking me not to pursue the case at the Court of Appeal,” NCPB legal team lead Joshua Nyawara told the committee.
A letter written by one Brian Hongo to the then Kenya Anti-Corruption Commission (KACC) accused lawyer Ahmednasir Abdulahi, former Agriculture Minister Kipruto Kirwa and the arbitrator, Evans Gature, of having interfered with the case.
Dr Kiome said the ministry had not budgeted any money to salvage NCPB, saying the attachment of the firm’s property happened after the allocations had closed.
If the board does not pay the Sh550 million awarded to the firm last year, its operations are likely to grind to a halt. Already the company has attached the board’s assets and bank accounts, leaving it with no money to buy preservation materials for the 2.2 million bags of maize in the Strategic Grain Reserve.
Dr Kiome said the board was aware of a court case set for a ruling this Friday in which Erad is seeking to auction NCPB property.
“We will not be involved in paying for anything that was not delivered"
Last week, NCPB managing director Gideon Misoi said former vice president Moody Awori had tried to intervene in the dispute, despite Grace Sarapay Wakhungu, one of the directors of Erad, being his sister. The other directors of the company are Sirisia MP John Waluke and Jacob Juma.
“We have written numerous letters to the anti corruption commission and the Criminal Investigations Department seeking to have the proprietors of this company investigated,” said Dr Kiome.
The firm has already attached NCPB bank accounts with Sh297 million and are seeking prohibitory orders for the boards’ property to realise the remaining Sh264.86 million.
NCPB lawyers had advised that the balance be deposited in court as guarantee, pending determination of the case in the Court of Appeal.
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