Kenya's military bought seven defective combat aircraft from the Royal Jordan Air Force it has not used for the past 10 years, bringing into question whether the public got value for money in the 2007 deal.
Auditor-General Edward Ouko says audit verification of the aircraft, procured at an initial cost of $15,291,503 (Sh1.58 billion at current rate), shows that the defects identified at the time of delivery had not been rectified as at the date of inspection in June 2016.
“An audit verification of the aircraft was carried out in June 2016 at Laikipia Air Base and…audit of fuel and servicing records indicate that the seven aircraft have not been in operation from the time they were procured,” Mr Ouko says in a qualified audit opinion that has been submitted to Parliament.
The report, dated March 16, 2017, shows that the Ministry of Defence procured the aircraft, related services and spare parts through government-to-government negotiations and several signed contracts.
“The purchase price of aircraft recorded in contract No. RJAF/KAF/2007 dated April 26, 2007 was US$15,291,503,” Mr Ouko says in his latest audit of the ministry for the year to June 2016.
He says technical assistance and maintenance services recorded in the agreement dated April 27, 2007 were procured at $12,264,995.
“A direct procurement of supplementary services for the fleet was signed on January 30, 2009 for a sum of $2,883,561. However, details of these services have not been provided for audit review contrary to provisions of Section 9 (i)(e) and (f) of the Public Audit Act, 2015,” Mr Ouko says.
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Defects not fixed
Records show that the aircraft were delivered, assembled and tested but an inspection undertaken by the ministry’s technocrats revealed a number of defects that have not been corrected to date.
Mr Ouko said an addendum for the purchase of spare parts show that the ministry procured them at a cost of $12,956,827 on unspecified date through restricted tendering instead of procuring directly from the specific aircraft manufacturer.
“I am unable to confirm under the circumstances whether value for money was obtained in the procurement of these spare parts or whether payments for the spare parts were lawfully and effective as required under Article 229(6) of the Constitution of Kenya 2010,” Mr Ouko says in the report that also revisits the previous year’s audit issues on the procurement and utilisation of hydraulic excavators.
The report says records revealed that the Ministry of Defence bought two Caterpillar 374 DL through direct procurement from Mentrac Kenya Ltd at a cost of Sh185.3 million instead of Sh40 million, which was the prevailing market price based on a survey undertaken by the user in the financial year 2011/12.
“No explanation has been given so far for excess and illegal payment of Sh145,323,993 over and above the market price,” Mr Ouko says.