Seven more senior KPC managers arrested
EACC officers held the seven over loss of public funds totalling more than Sh660 million in the October 2014 procurement of 58 Hydrant Pit Valves. The valves were meant to replace the faulty ones at the Jomo Kenyatta International Airport (JKIA).The seven were to take pleas on Tuesday.
Former Kenya Pipeline Company MD Joe Sang (right) and co-accused Vincent Korir Cheruiyot at Milimani Law Courts on December 10, 2018. PHOTO | NMG
Seven senior managers of the Kenya Pipeline Company (KPC) have this morning been arrested in a second wave of arrests targeting current and former managers at the State-owned firm. Ethics and Anti-Corruption Commission (EACC) officers held the seven over loss of public funds totalling more than Sh660 million in the October 2014 procurement of 58 Hydrant Pit Valves to replace faulty ones at the Jomo Kenyatta International Airport (JKIA).The anti-graft watchdog is also looking for nine more suspects including former KPC managing director Charles Tanui and two directors of Aero Dispenser Valve Ltd. Kenyan authorities have approached their Canadian counterparts to investigate and prosecute the managers of Allied Inspection and Testing Inc led by its proprietor Jim Yukes. Those in custody are the general manager finance Samuel Odoyo and procurement manager Nicholas Gitobu, both of whom had earlier been charged alongside outgoing managing director Joe Sang for graft arising from the Sh1.9 billion Kisumu Oil Jetty.Others in custody are business development officer Peter Gaitho Machua, administration manager Jane Jesanai Nakodony, a senior electrical engineer Charles Nderitu Maitai, a procurement officer Fredrick Kagosh Ogenga and a director of Aero Dispenser Valve Ltd Francis Omondi Obure. The seven were to take pleas on Tuesday.EACC is also seeking eight others including Mr Tanui, operations manager Philip Kimelu, chief manager electrical Bramwell Wanyalika, ICT manager Francis Muraya, mechanical engineer Charles Ochieng’ Ouko, accountant Emilio Mwai Nderitu, two directors of the Kenyan front – John Huba Waka and his wife Beryl Aluoch Khasina – and Canadian Mr Yukes.
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In October 2014, the Kenya Pipeline Company (KPC) went shopping for 58 Hydrant Pit valves to replace the faulty ones at the JKIA.At the time, the KPC board had passed a resolution that given the urgency of the matter, the company would go for direct single sourcing from the US manufacturer, Cla-Val Company Limited of Costa Mesa, USA. The project cost was set at Sh59 million and Sh22 million in taxes and the secretariat was tasked with establishing communication with the US manufacturer.But along the way, KPC never contacted Cla-Val. Instead, the State firm approached a Canadian company, Ms Allied Inspection and Testing Inc, which was charging Sh660 million for the contract, which is 814 per cent of the cost that had been approved by the board.By the time the EACC noticed suspicious activity and stopped further payments, KPC had already paid, upfront, Sh254 million ($2.5 million). Allied Inspection and Testing then approached Cla-Val seeking to purchase the valves on behalf of KPC. The Canadian firm used a Nairobi based company, M/S Aero Dispenser Valve Limited, “a briefcase company having its offices at Utalii House, Nairobi” as its front in supplying the valves at those inflated costs.According to the sleuths, the involvement of the Canadian company and its Kenyan front went contrary to the Tender Committee’s resolution which had recommended M/s Cla-Val Co. Ltd “being the Original Equipment Manufacturers for the items tendered.”“It also defeats the justification for direct procurement which was that the equipment be procured from the Original Equipment Manufacturer.”Questions have also been raised over how the Canadian company came to the picture yet only Cla-Val was to be contracted. The KPC managers changed the supplier without going back to the tender committee or the board to vary the resolution. KPC’s claims that it attempted to contact US manufacturer Cla-Val are also being questioned as contact was never received in the USA. Queries were addressed to [email protected] and [email protected], both of which are addresses for Canada. “Available evidence indicates that officials at KPC were in communication with M/s Allied Inspection and Testing Inc. to supply the equipment. M/s Allied Inspection and Testing Inc had in turn initiated communication with Cla-Val to be appointed as an agent of Cla-Val without disclosing that there were bid documents prepared in favour of Cla-Val,” EACC’s report on the scandal states.KPC has lately been in the news after last week’s announcement that Mr Sang was retiring. Shortly after, he and other senior KPC managers were arrested last week and spent the weekend in police custody as they waited to be charged.Those charged are Mr Sang, company secretary Gloria Khafafa and Supply chain manager Vincent Cheruiyot. Others were due to be charged later. They were charged with abuse of office, engaging in a project without prior planning and willful failure to comply with applicable procedures and guidelines relating to the management of public funds. They were released on a bond of Sh3 million bail each with a surety of similar amount and an alternative cash bail of Sh2 million.They were also required to deposit their travel documents in court.