Audit big infrastructure contracts

Transparency International (TI), the global anti-corruption watchdog, says in a new report that Chinese and Israeli companies are among international contractors who regularly bribe Kenyan officials to win lucrative multi-billion shilling public infrastructure contracts.

The report says that bribery of Kenyan officials has continued unabated over the years partly because China and Israel are not enforcing the existing anti-bribery laws. As we all know, China has criminalised the bribery of foreign public officials, in line with obligations under the UN Convention Against Corruption.

But TI says that there has been no known enforcement against foreign corrupt practices by its companies, citizens and or residents.

The report says that despite the fact that its companies and individuals have been the subject of publicly reported investigations and charges in numerous countries, including Bangladesh, Ethiopia, Kenya, Sri Lanka, the United States and Zambia - Bejing has not made arrests on reported corruption.

While singling out China as the “world’s leading exporter of corruption,” the TI insists that only stringent punishment of Chinese officials implicated in graft will change the trend. “China should acknowledge the influence of its companies in terms of how they conduct business in foreign markets,” the TI report says.

Coming at a time when the administration of President Uhuru Kenyatta is in the middle of implementing high profile prosecutions, the findings of the TI report provide a good juncture for commenting on the high- profile prosecutions.

We used to say that the fight against corruption in this country always targeted the small fish.

But in the current wave, it is clear that anti-corruption authorities have targeted both big and small fish. Several permanent secretaries, governors, and top public officials are in court facing corruption charges.

The top management of State- controlled monopoly power distributor, Kenya Power, including managing director Ken Tarus, have been arraigned in court to face corruption charges.

But perhaps most sensational is the case where the chief executive of Kenya Bureau of Standards, Mr Charles Ongwae, the whole of his executive committee and local officials of an international Moroccan fertiliser supplier- have been arraigned to face charges of murder.

Even the most ardent critic of the administration admits that the ongoing prosecutions exhibit elements of seriousness on the part of the government. But looked against the report by TI, it would appear that the current-anti graft crusade is yet to touch corruption where it hurts the most-namely, the shenanigans by Chinese and Israeli companies.

Contractors from these two countries have been winning massive deals with parastatals under circumstances where contracts are gifted merely on the basis of secret MoUs signed by ministers. I recently came across a case where a Chinese group had signed an MoU for a massive $156 million with one of the government ministries.

Such projects come with loans negotiated on the government’s behalf by the Chinese contractors. Invariably, they come with a massive advance payment released months before the contractor has lifted a spade.

Loans contracted through MoUs are the biggest factor when it comes to explaining the recent and rapid accumulation of commercial foreign loans in our external debt register.

It is time the anti-corruption crusade started putting its finger on where corruption is hurting us most- namely the shady deals involving Chinese and Israeli contractors.

Investigators should look at all projects contracted through MoU’s and shady commercial contracts and especially cases where huge advance payments have been made to Chinese and Israeli firms before any work is done.

The starting point should be a thorough scrutiny of our external register to determine the circumstances under which those loans were recorded in our books in the first place.

Since China is poised to continue doing big projects here, we should ask ourselves the following questions: First, what must we do to ensure that our take up of Chinese projects does not lead to an unsustainable build-up of our external debt.

Secondly, where is the transparency in an arrangement where a foreign contractor conducts for you the feasibility study on terms of reference he has himself drawn, does engineering designs on its own, and then proceeds to organise and facilitate a loan for you from a Chinese bank?