Central bank governor faces charges over security tender

Criminal investigations facing Central Bank of Kenya (CBK) governor Njuguna Ndung’u reached a critical stage Monday with the recommendation that he be charged with abuse of office.

Director of Public Prosecutions (DPP) Keriako Tobiko says there are solid grounds to prosecute Prof Ndung’u over the Sh1.2 billion tender to install a modern security system at the CBK.

The recommendation is contained in Mr Tobiko’s letter to the Ethics and Anti-Corruption Commission (EACC) seen by the Business Daily, and in which the DPP says he has given the green light for the matter to go to court.

Mr Tobiko’s letter is in response to last month’s recommendation by the EACC that Prof Ndung’u and other senior CBK officials be charged with abuse of office for failure to comply with public procurement regulations, causing the loss of more than Sh400 million in public funds.

Though he does not sit on the CBK’s tender committee, Prof Ndung’u has found himself at the centre of the procurement controversy because of the protracted battles he fought with the tender committee before the job was awarded to Horsebridge Networks Systems East Africa Limited.

READ: Top CBK officials face court action over irregular tenders

At the centre of Prof Ndung’u’s troubles is his alleged rejection of unanimous advice from internal and external legal teams to appeal the Public Procurement and Administrative Review Board’s decision to award Horsebridge Networks the contract.

Horsebridge, an international IT company with a local presence, was among six firms evaluated for the contract. The others were Orad Limited, Azicon Kenya Limited, Engineered Systems Solutions Limited, Indra Limited and Aua Industria.

It moved to the appeals board seeking a reversal of the CBK’s tender committee’s decision to reject all the bids for the security systems job.

Investigations have revealed that Horsebridge filed its appeal before the tender committee announced its decision, raising questions as to how it knew the outcome.

The tender committee chaired by deputy Governor Harun Sirma had nullified the CBK technical evaluation team’s decision to award the tender to Horsebridge after it detected errors in the tender documents.

This triggered a series of events that saw the matter end up at the Public Procurement Oversight Authority and ultimately with the anti-corruption team.

Horsebridge had petitioned the Public Procurement and Administrative Review Board, saying it had won the tender as the lowest bidder. 

But the correspondence seen by the Business Daily shows that the tender documents had a number of errors, which the tender committee felt could have compromised the outcome.

“The technical capability to install and maintain the ISMS as quoted was poorly crafted and was not used well by the evaluation team. Evaluation criteria revealed inconsistencies among the individual scores,” state the minutes of the tender committee.

The procurement review board “awarded’ HorseBridge the tender and dismissed the CBK and the tender committee as a “wild horse who should be calmed”.

“The board holds that the procuring entity and specifically the tender committee is behaving like an unruly horse and it has to be tamed and calmed ... The board orders that this tender be and is hereby awarded to the lowest bidder Horsebridge Networks Systems,” stated Mr Mwaniki Gachora in the board’s communication.

Prof Ndung’u agreed with the procurement review board’s decision, although the CBK lawyer, Mr Fred Ngatia, had advised him to appeal and challenge the board’s decision at the High Court.

Prof Ndung’u sought Mr Ngatia’s advice on February 26, last year, after the matter reached the appeals board.