Tana River County has been stripped of its functions of procuring services and products by the Public Procurement Regulatory Authority (PPRA), becoming the first devolved unit to suffer the fate even as the watchdog intensifies a purge against shady tender deals.
PPRA Director-General Patrick Wanjuki said the regulator had begun the process of transferring the county’s procurement role to another entity to safeguard public funds after officials at the devolved unit failed to heed to a warning against opaque tender deals in the 2022/23 and 2023/24 fiscal years.
The PPRA did not disclose the identity of the entity that will take over the county’s procurement activities valued at more than Sh6.5 billion, even as it accused the devolved unit of failing to comply with a legal requirement to upload key procurement details to the Public Procurement Information Portal (PPIP).
“Your failure to comply with the Authority's directives is in violation of Section 34 of the Act read together with Regulations 23(e) of the Regulations, which constitutes an offence under Section 176(1) (a) of the Act,” Mr Wanjuki said in a letter to the County Executive Committee Member for Finance and Economic Planning, Mathew Babwoya Buya.
“In view of the foregoing, take note that the Authority has now initiated the process of transferring the procurement responsibility of your procuring entity to another procuring entity to safeguard public funds,” he added in the letter to the county official dated September 3, 2024.
Section 52 (1) of the Public Procurement and Asset Disposal Act, 2015, gives PPRA powers to transfer a public entity’s procurement responsibility to another entity or agent.
“The Authority shall have the power to transfer the procuring responsibility of a procuring entity to another procuring entity or procuring agent in the event of delay or in such other circumstances as may be prescribed,” the Act states.
The action taken on Tana River County is the first against a public entity as the PPRA acts to stamp its authority and instil discipline in Kenya’s public procurement, where billions of shillings are lost annually as entities break the law.
The PPRA says it has been visiting entities that fail to upload procurement information on the PPIP to understand the challenges preventing them and improve their procurement processes, including Tana River where its chairman Jimmy Kahindi led the team on July 3, 2024.
Mr Wanjuki said on Tuesday that once the Authority transfers the county’s procurement responsibility, “it will affect all procurement proceedings.”
“PPRA is in negotiations with the procurement entity that will take over the responsibility from the county government,” he told the Business Daily.
In 2022/23, the county government spent Sh4.6 billion and in the first nine months of 2023/24, it spent Sh3.1 billion, according to the Controller of Budget reports.
The county’s budget for the current fiscal year- from July 2024 to June 2025- indicates that Tana River plans to spend Sh9.3 billion, out of which Sh6.6 billion falls under the procurement responsibilities.
The Auditor-General’s report on Tana River for the 2022/23 fiscal year, however, had a damning verdict on the county’s management of public funds, questioning the spending of hundreds of millions of shillings and giving the devolved unit an adverse opinion- meaning there was widespread gaps in the management of public funds that could have led to losses, lack of value for money in projects implemented and flouting of laws.
Tana River Governor Godhana Dhadho did not respond to questions by the Business Daily on the county’s failure to upload its procurement information on the PPIP, transparency in the awarding of contracts and issues raised by the auditor-general, including several queries on unsupported expenditures to the tune of hundreds of millions of shillings and some 58 abandoned projects valued Sh825.8 million.
The county on Tuesday pleaded with the PPRA not to take away the procurement responsibilities, while asking it to consider “a capacity building programme for the county to facilitate compliance with the requirements of the Act.”
“We request that you reconsider the decision to transfer the procurement responsibility away from the county and allow the county up to October 4, 2024 to comply with the requirements of the Act as summarised in your letters,” Finance CEC Mariam Bunu said in a letter dated September 6, 2024, to PPRA. The letter was delivered on Tuesday.
The PPRA had written to the county on 31 July 2024, giving it one month to upload details of its procurement activities for the two financial years on the PPIP.
In the letter to the then Tana River Finance CEC Brenda Mokaya, the PPRA noted that the county had not uploaded its procurement plan for the 2023/24 fiscal year in the PPIP, which made it difficult for the Authority to verify compliance with requirements such as reserving at least 30 percent of procurement budget for enterprises owned by youth, women, and persons living with disability.
The PPRA noted that while the county published 120 tenders on the PPIP in the year to June 2024, only 15 contract awards were published.
“Thus, the status of the other 105 tenders could not be ascertained as none of the said 105 tenders was published in the PPIP as having been awarded or terminated prior to award in accordance with the law,” the Authority stated.
“Your procuring entity did not disclose business ownership information in the PPIP for the 15 contracts awards that you published in the PPIP. This was inconsistent with PPRA Circular No.5/2023 of 27th October 2023 and Executive Order No.2 of 2018 cited above,” PPRA added.
