How Mwatela fixed Ndung’u, Kimunya in Kenya currency probe

Jacinta Mwatela, who headed the Central Bank of Kenya’s tender committee when it procured currency notes that have become the subject of a parliamentary investigation, provided key ammunition that MPs used to fix Trade minister Amos Kimunya and CBK governor Njuguna Ndung’u, a parliamentary report shows.

The report, which the Public Accounts Committee (PAC) tabled in Parliament last week, recommends that Mr Kimunya and Prof. Ndung’u should be investigated for their involvement in decisions that caused the loss of billions of shillings in public funds.

It has now emerged that Mrs Mwatela, who testified in camera, provided key leads that helped the PAC to nail the two senior public officers and recommend that they should leave office.

In her testimony, made public in the PAC report, Mrs Mwatela told the MPs how Mr Kimunya and Prof Ndung’u frustrated the signing of a $52.2 million currency printing contract that had been awarded to the UK security printer De La Rue, occasioning the taxpayers a Sh1.8 billion loss.

Mrs Mwatela gave a blow by blow account of the many instances where Mr Kimunya, then Finance minister, and Prof Ndung’u acted in violation of established procurement regulations – starting with the award of an interim order to print 390 million pieces of bank notes, contrary to the provisions of the Procurement Act.

“The consignment did not qualify as interim order which under the Procurement Act is defined as 10 per cent or less of the initial order,” she said.
Mr Kimunya’s decision to stop a cheaper contract to print 1,710 million pieces of banknotes from Malta resulted to a supply gap of 164.05 million, forcing the CBK to enter into expensive interim orders that pushed up the cost of the initial contract by Sh218 million.

A 10 per cent cap on an initial order of 1,710 million pieces of bank notes, limited the CBK to an interim order of 170 million pieces of bank notes or less, according to Mrs Mwatela.

The former long-serving Central Bank official cited three other interim tender orders that were made in breach of the law on Mr Kimunya’s instructions, including the 450 million pieces order to fill the currency stock-out in 2008.

“It was clear to me that the bank was out to break the law again in procuring currency outside the Procurement Act. I was not going to chair the Tender Committee meeting to sanction breach of law,” she said of her battles with Mr Kimunya over the currency printing contracts.

It was the view of the Tender Committee that the bank, through Prof Ndung’u, had deliberately failed to implement the cheaper three-year contract with De La Rue, said Mrs Mwatela who chaired the CBK’s Tender Committee, pointing to direct liability on the part of the governor.

“There was dilatory conduct on the part of the governor when he delayed the implementation of the contract.

The contract was deliberately frustrated to the status of the stillborn,” said Mrs Mwatela, who had at the time resumed her position as deputy CBK governor.

The report also accuses the CBK board of failing to give direction in view of the legal provisions on procurement and to determine the way forward in view of the illegal cancellation of the contract.

“The bank was exposed. I was disillusioned that I offered to resign as chair of the Tender Committee, but the Procurement Act defines the deputy governor as the chairman of the committee,” she told MPs in her confidential presentation.

Mrs Mwatela was later removed from the Central Bank and appointed a permanent secretary, a position she declined and opted to resign from CBK.