Sh6 billion maize rots after supplier attaches NCPB stores
A National Cereals and Produce Board depot. FILE PHOTO | NMG
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NCPB managing director Gideon Misoi said the maize was going to waste for lack of fumigants, which protect the strategic grain reserve from rodents and other pests.
NCPB, Misoi told the Public Investments Committee, could not afford the pesticides because its assets had been attached over a Sh550 million court award to a supplier.
Maize worth Sh6.6 billion is rotting in the National Cereals and Produce Board (NCPB) stores after being infested by pests, exposing Kenyans to expensive imports in case of a famine.
NCPB managing director Gideon Misoi said the maize was going to waste for lack of fumigants, which protect the strategic grain reserve from rodents and other pests.
NCPB, he told the Public Investments Committee, could not afford the pesticides because its assets, including bank accounts, had been attached over a Sh550 million court award to a supplier.
“The award is a serious threat to national food security. The reserve stocks famine relief, non-food items, disaster equipment and machinery and other government assets. They are at risk for as long as this matter remains unresolved,” he said.
NCPB accounts were frozen and its vehicles seized by Erad Suppliers and General Contractors Limited last year.
Prof Misoi said utilities remained unpaid and security firms could withdraw services, putting the entire strategic grain reserve (SGR) stocks at risk.
Committee member and Sirisia MP John Waluke was removed from the proceedings over conflict of interest. He is listed as one of the three directors of Erad. Soon after, Jacob Juma, the proprietor of Erad, appeared at the committee without any invitation.
“I have come in after learning that you had summoned me since my company had been adversely mentioned. I have interest as the supplier,” Mr Juma told committee chairman Adan Keynan.
The other director in the company is Ms Grace Sarapay Wakhungu, former vice president Moody Awori’s sister.
Prof Misoi said the dispute with Erad had been “marred by allegations of corruption, gross interference and undue influence” during the arbitration and also at the courts.
“The arbitration was marred by allegations of corruption. In the course of the arbitration, it transpired that attempts to influence the ruling of the arbitrator had been made. The corruption overtures were recorded by the arbiter in the proceedings,” he said, adding that the matter had been reported to the Ethics and Anti Corruption Commission.
The board said Mr Awori at one point convened a meeting at his Jogoo House offices to try to arbitrate on the matter, prompting Mr Keynan to demand minutes and names of those who attended the meetings to be produced.
Erad moved to court to sue the NCPB for breach of contract for the supplier of maize grain for relief in 2004. The firm has already attached NCPB bank accounts worth Sh297 million and are seeking prohibitory orders for the boards’ property to realise the remaining Sh264.86 million.
Nyawara & Co. Advocates, which is representing NCPB, has advised that the pending balance be deposited in court as guarantee, pending determination of the case in the Court of Appeal.
The firm took the board to an arbitrator as provided in the contract, alleging breach and damages after it was denied irrevocable or confirmed sight letters of credit.
The board maintained on Tuesday that Erad did not supply any grain to warrant the huge court awards.
“The award was given based on goods not delivered. Were you to award, then terminate and get the proceeds later? Is this not a grand scheme hatched to kill NCPB as was the case with Kenya Farmers Association (KFA)?,” Wundanyi MP Thomas Mwadegu posed.
Prof Misoi said Erad had secured orders lifting an injunction that had been secured by the board in January. The appeal is due to be heard at the end of this month.
