A section of MPs during the first sitting of the 11th Parliament on March 28. A spirited attempt to stop debate on the report on the contract between National Cereals and Produce Board (NCPB) and Erad Supplies and General Contracts flopped on Tuesday when Speaker Justin Muturi ruled that the matter should be canvassed. Photo/FILE
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A spirited attempt to stop debate on the report on the contract between National Cereals and Produce Board (NCPB) and Erad Supplies and General Contracts that has crippled the grain handlers’ activities flopped yesterday when Speaker Justin Muturi ruled that the matter should be canvassed.
Ali Wario (Bura) failed to convince the Speaker that the report touched on matters before the Court of Appeal and should therefore not be allowed to be debated.
A spirited attempt to stop debate on the report on the contract between National Cereals and Produce Board (NCPB) and Erad Supplies and General Contracts that has crippled the grain handlers’ activities flopped on Tuesday when Speaker Justin Muturi ruled that the matter should be canvassed.
Ali Wario (Bura) failed to convince the Speaker that the report touched on matters before the Court of Appeal and should therefore not be allowed to be debated.
Mr Muturi said the fact that a matter is in court does not stop Parliament from debating a House report so long as it does not touch on the merit or demerits of the case.
Public Investment Committee (PIC) chairman Adan Keynan was allowed to initiate debate on the special investigation into the 2004 contract for the supply of 6 million bags of maize (180, 000 metric tonnes) for famine and Strategic Grain Reserve (SGR).
“I have been approached severally including this morning (yesterday) to delay this report. What we are seeing in the opposition of this report was something we expected,” he said.
Mr Keynan said the Auditor General, who conducted a special audit on the NCPB-Erad contract for the supply of 40,000 metric tonnes of white maize tallies with the conclusion of the House report.
The report documents a scheme where top government officials conspired to defraud the government money through the maize import.
The report tabled in Parliament last week has recommended that the Ethics and Anti-Corruption Commission (EACC) investigates the role played by President Kenyatta Chief of Staff and Head of Public Service Joseph Kinyua, Kisii governor James Ongwae and IGAD executive secretary Mahboub Maalim who then were members of the SGR.
The team also recommended further investigation of former NCPB managing director Tirop Kosgey, members of the tender technical committee, individuals within the judiciary and directors of Erad-Sirisia MP John Waluke, Grace Wakhungu Sarapay and Jacob Juma-among other individuals.
Mr Keynan said two financial institutions I&M and Dubai bank should also be probed on their roles in the issuance of a bid and performance bonds that the board relied on to issue the contract for the supply of 40,000 metric tonnes of maize by Erad.
The company never delivered a single grain but has since attached the board’s property including bank accounts amounting to Sh313 million leading to the closure of NCPB.
In initiating debate on the report, Mr Keynan said a number of bureaucrats in 2004 decided that there was drought without any forecasting and proper planning so that cartels could prevail upon the government to declare drought as a national disaster to facilitate maize imports.
He said within one and a half months of the declaration of drought as a national disaster and authorization of maize importation by the cabinet, the same technocrats prepared a report that indicated that the country was going to have a bumper harvest and therefore there was no need to import.
Mr Keynan said out of the 180,000 tonnes of maize that were to be imported only 70,000 tonnes were imported.
He said among the five companies that were awarded tenders to bring in maize, Erad which was registered in 1997 but got its VAT registration on July 16, 2003 had no capacity to import the maize.
“By the time the company bid, it had assets of Sh7 million and bank overdraft of Sh3 million. The company was technically insolvent and did not meet any of the requirements to import 40, 000 tonnes of maize without capital,”
“In our own opinion, it was well choreographed and orchestrated programme meant to benefit certain cartels and kill NCPB,” the Eldas MP said.
Mr Keynan and his deputy Kimani Ichung’wa hailed then Treasury PS Kinyua for pointing out to two other SGR trustees warning NCPB not to open letters of credit to Erad or any local companies which was ignored by Mr Mahboub and Tirop.
“It was a scheme designed by people within and without NCPB to defraud Kenyans…there was no any intention by Erad to supply maize to NCPB,” Ichung’wa said.
Mr Keynan said Erad approached I&M Bank and got a conditional bid bond based on a draft contract and accused the bank of failing to inform the board that it had cancelled the bid.
“We concluded that the bank was part of the cartel because every attempt was made to conceal the existence of that bid bond. The board did not ascertain the authenticity of the bid bond. Erad did not make full disclosure leading to consummation of the contract,” he said.
He said Erad directors also went to Dubai bank and presented a duly executed contract to secure a performance bond in order to import maize.
Mr Keynan said there was no intention from the beginning to import maize. He added that the board did not invoke provisions of the contract to cancel the tender to Erad until the firm went to an arbitration for breach of contract.
