House puts ex-KRA boss on the spot over fuel supply contract

Parliament wants former Kenya Revenue Authority commissioner-general Michael Waweru held accountable for single sourcing a Sh57 million oil supply contract for the tax agency.

The National Assembly’s Public Investments Committee (PIC) said KRA flouted provisions of the Public Procurement and Disposal Act by single-sourcing National Oil Corporation of Kenya (NOCK) to supply fuel for its motor vehicles and generators.

“The committee recommends that Mr Waweru... should be held accountable for any price variation in the contract,” PIC says in its report of audited financial statements for State corporations.

During the scrutiny of KRA’s books of accounts for the financial year 2012/13, PIC heard that the statements reflect motor running expenses totalling Sh178.3 million out of which an amount of Sh57.5 million was paid to a firm for the supply of fuel.

The auditors told PIC that there was no evidence that any contract agreement existed between the taxman and the firm.

“There was no evidence that the firm supplying the fuel was identified in line with the Public Procurement and Disposal Act, 2005. In the absence of a contract agreement, it was not possible to confirm the propriety of the fuel expenses totalling Sh57,567,011 incurred for the year ended June 30, 2013.

John Njiraini, the KRA commissioner-general, told the committee chaired by Eldas MP Adan Keynan that KRA awarded a contract for supply of petroleum products countrywide to NOCK through direct procurement.

In submissions to the committee, Mr Njiraini said NOCK demanded a down payment, which the authority was not in a position to make without a bank guarantee as provided under the Public Procurement and Disposal Act for all advance payments.

Mr Njiraini said that KRA had procured the fuel supply contract with Ilsan Enterprises Ltd (Shell Station, Haile Selassie Avenue).

“Since the contract with NOCK had not been concluded, the authority continued to draw fuel from Ilsan Enterprise, the immediate former suppliers, to facilitate continuation in revenue collection operations,” Mr Njiraini said in his brief to the committee.

He said the fuel was drawn for official operations using duly authorised internal control documents called PLO (Petrol, Lubricants and Oil).

The committee further heard that the choice of NOCK and Ilsan fuel stations was informed by the proximity, and convenience, of the two stations to KRA offices at Times Tower.

Mr Njiraini told PIC that retail fuel prices were regulated by the Energy Regulatory Commission (ERC) since December 2010 hence there was no price differential among the suppliers.

He informed lawmakers that the procurement contract with NOCK had since been regularised.

PIC tabled its report last week. Its adoption could see MPs call for further investigations into the fuel supply contract between KRA and NOCK.