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Citizen Weekly

Monday, 6 April 2015


Overnight billionaires: Why Uhuru had to act

(William Tunoi, Matemu, Keino and Fake Matemu Letter)
Investigations by Weekly Citizen reveal that Uhuru Kenyatta was forced by the donor community to act on rampant corruption cases which have seen some individuals in his government turn into overnight billionaires. What was witnessed last week was as a result of pressure from the US government which threatened to withdraw funding for major development projects especially in the energy sector.
Investigations reveal that the American government for a long time has been worried that corrupt government officials were siphoning donor funds at an alarming rate hence threat to withhold further funding. It was against such fears that Uhuru moved fast and tabled the list of shame forcing named officials to step aside to pave way for investigations by the Ethics and Anti-Corruption Commission.
Sources say the US government is worried at the high rate of corruption fearing that stolen funds might threaten peace in the region especially in the wake of the ICC case against Deputy President William Ruto which could go either way and which is feared could cause chaos.
Uhuru had been advised to crack the whip long ago but ignored until last week when he acted. He had feared cracking the whip against the wishes of his deputy was likely to destabilise his government.
The fear is that huge amounts of corruption money ending up in top Jubilee politicians, although majority of those in the list of shame were allied to Ruto’s URP, the list was fairly balanced with Uhuru’s allies also in the list. Ruto unaware that majority of the named individuals were from his side, accompanied Uhuru to parliament.
Sources say that Uhuru is particularly feeling the heat from the US over mega scandals that have rocked the energy docket whose cabinet secretary is Davis Chirchir. The US had warned that with Chirchir still heading the energy sector, all projects would be suspended until he is cleared or removed.
Uhuru on the other hand moved fast and because of the infighting at EACC, he decided to deal with CEO Halake Waqo, his plan was to avoid manipulation of the list from those mentioned. A clear indication was a letter purported to have been signed by Mumo Matemu which was presented at parliament showing EACC had cleared the Geothermal Development Company from any malpractices.
The mega scandals at the Energy ministry that are threatening the survival of Jubilee administration where billions are alleged to have been siphoned from state coffers are enough to run the country for one year.
The cartel is said to target Kenya power and GDC where major projects are donor funded to the tune of billions. It has been discovered that Chirchir had vested interest in the Mui Basin coal mining project where one investor was willing to cough Sh200m as kickback while another investor had promised Sh400m for the same tender.
At the EACC, all is not well as Irene Keino and Matemu are a worried after they mentioned GDC and Anglo Leasing investigations. The level of impunity in the people mentioned in the above scandals had gone so high that they felt and believed they were untouchable to the extent that the GDC CEO Silas Simiyu is alleged to have insulted the current chairman Abbass Faissal even threatening that he would have him removed from GDC during a stormy senior staff meeting. He is said to have bragged and boasted that he is the one who removed previous chairmen. 
But the big question is how Simiyu and his cronies have managed to keep themselves in power. It has been discovered that they survive on pocketing hefty kickbacks which they use to compromise top government officials.
A perfect example is tender for design, supply, installation and commissioning of Integrated Management Systems worth Sh344,523,712 which was awarded to a company trading as Tekno International Ltd owned with Mwala MP Vincent Musyoka who is a member of the parliamentary energy committee. The tender is dated December 4 2014. It is believed that this was a way of rewarding the energy committee through the said company hence pocketing them.
Another tender is that of provision of Manpower Services worth Sh223,644,948 to a company trading as Linksoft Communications Ltd. The company is connected to a Nairobi businessman Antony Wahome who also has interest in HillCrest Group of Schools formerly owned by former Kiharu MP Kenneth Matiba.
It is not known how Linksoft which is a computer and IT company tendered for consultancy work for geothermal human resource recruitment and won the tender despite the fact that it has never carried such work before.
Interestingly, in the contract it is indicated that “whereas GDC has requested the contractor to provide certain manpower services for geothermal drilling at Menengai and Baringo geothermal projects as defined in the general conditions of contract attached to this contract, the contractor, having represented to GDC that they have the required professional skills, and personnel and technical resources, have agreed to provide the services on the terms and conditions set forth in this contract and GDC has subsequently accepted the proposal submitted by the contractor for the services in accordance with the terms to be set forth under this contract at a consideration of Sh223,644,948 per annum inclusive of 1.6pc VAT and 5pc withholding tax”.
The notification of award of tender to Linksoft was communicated through a letter signed by Simiyu dated July 18 2014 (REF:GDC/MD/005/14  15) which reads in part “This is to notify you that Geothermal Development Company Limited has awarded you the above at your quoted personnel rates and total tendered price of Sh223,644,948 per year for a period of two years inclusive of 5pc withholding tax and 16pc VAT”.
The contract was later signed by Simiyu for GDC and Praxidis Saisi who is the company secretary and Wahome for Linksoft Ltd.
GDC will have to explain further how they gave the company work they themselves can not do only to end up subcontracting again.
Linksoft after getting the tender subcontracted another company called CDL which has been recruiting 500 staff in Nakuru Menegai station. The company is alleged to be owned by CEO Simiyu, Saisi and Irene Onyambu, the head of HR.
Another tender for provision of drilling consultancy services at Menegai Geothermal worth Sh2.4 billion awarded to a company called Lantech  Africa Ltd, a company whose CEO is said to be Aquinas Wasike who is said to be a relative to Simiyu  who is the GDC CEO. The tender was signed on July 1 2013. If true, all proceeds from this company are alleged to belong to Simiyu who may be using his relative as a proxy.
Another tender for provision of top holding drilling services for 20 geothermal wells was signed on January 15 2013 worth Sh4b and since given. Only one well has been dug. The tender was won by Cluff Geothermal Great Rift Drilling Ltd and Ardan Risk and Support Services (K) Ltd. This is one of the tenders that EACC is investigating together with other tenders. Big question is why this company won tender to collect steam which had not yet been collected from underground. No prospects were done to ensure there is enough steam to warrant such a project.
Another controversial tender is that of rig move services. In order for GDC to carry its own rig move activity/programme, the organisation in the years 2010 and 2011, at a cost of approximately Sh400m, outsourced the rig move services from Bonafide Clearing and Forwarding Company Ltd at Sh11m per move for a one year period.
In September 2012, GDC outsourced the same services from the same company above for a total of Sh42,746,000. This was an escalation of approximately 300pc.
Going by this new figure, GDC is anticipated to have spent on rig move Sh1.2b. This, based on 2011 quotation, GDC would have spent Sh600m less. For the same services, KenGen entered into a contract with the same service provider the Bonafide Clearing and Forwarding Company for a longer distance (3km) for only Sh18m which is Sh24m less per rig move than at GDC.
The illegality in this tender is that there was no justification or due diligence in escalating the rig move. Same contractor Bonafide offered the same services to KenGen two years later at Sh18m which is less than half the amount charged to GDC.
Another project where corruption is said to have taken place at GDC is top holing services which is the use of smaller rigs to drill the top part of the well, for this case, 1000 metres before engaging the main rig. The objective is to fasttrack the drilling operations. In January 8 2013, GDC awarded top holing services to Fluff Geothermal Renewable Energy Ltd at Sh4,023,811,000.
The service was single sourced contrary to PPOA guidelines. The board was not consulted for concurrences at single source the services from Cliff Geothermal Renewable Ltd at Sh4,023,811,000. Even if the board was to concur, it could not validate the contract.
In 2012/13 GDC budget submitted to ministry of Energy and Petroleum, there was no provision of Sh4.5b to cover the outsourced top holing services. In order to fund this service, GDC managed to remove money partially allocated to other budget items contravening the laiddown budgeting process. The single sourcing to the tune of over Sh4b is unheard of in the history of public procurement in the energy sector.
Another controversial tender is that of supply of additional new 2000hp doc electrical land rigs and associated equipment GDC/has/052/2011:2012.
On November 27 2012 GDC awarded HH supply of two new rigs through the tender GDC/has/052/2011:2012. On examining the budget allocated for the supply of the rigs, GDC in a letter to African Development Bank requested a no objection to award the supply of an additional rig to the same supplier, HH.
On January 9 2013, GDC awarded HH supply of the additional rig vide tender no GDC/has/052/2011:2012 and the same was signed by HH on January 11 2013, two days later. Note that the above award was subject to AfdB issuing  GDC a “no objection”. However GDC received the no objection for signing of the contract January 28 2013 which was18 days later.
Surprisingly, GDC gave a letter of offer before receiving a no objection from the financier, AfdB. Even if the contract for supply of the three rigs was signed on January 30 2013, we make the following observations:
Supply of two rigs awarded on November 27 2012
Supply of one additional rig on January 9 2013 in which case GDC had specifically requested a no objection to be allowed to award the same.
The objection for the purchase of the third rig was not provided by the bank and the bank only provided a no objection for signing of the contracts. Who gave authority for the purchase of the third rig then ?
On January 14 2013 vide a letter ref  AfdB/EARC/ltd/2013/01/024 GDC only requested the banks no objection for the signing of contracts. This is different from a no objection for purchase of additional rig so who authorised the board/AfdB or management?
This is how overnight billionaires are made at GDC and what one needs to do is to be in good books with Simiyu and once you know him, he will ensure your project is tailor made to meet the tender requirements and to beat other tenderers. 
During the period 2013, GDC had an estimated staff of around 500 but today the staff is approximately 1000. When the CEO was asked why the recruitment was done without following the right procedure, his excuse was that it was done using internal data base.
The question is which is this data base? It is alleged that the recruitment was politically instigated to help politicians fix their relatives and friends so as to protect him in the parliamentary proceedings.
One staff member is identified as the son of deputy vice chair of a parliamentary committee. This violated the PSC guidelines of staff recruitment where he is even accused of employing more lawyers than technical staff.
Recent promotions of general managers reportedly have demotivated other staff who felt those positions could have been advertised for competitive recruitment. The recruitment has resulted in bloated staff with no work to do but idle and pocket taxpayers’ money.
Sources say that Simiyu had planned to ambush the GDC board members with an allegedly fake letter purported to have been signed by Matemu. The letter supposedly cleared GDC of all allegations but Uhuru through State House spokesman Manoah Esipisu pulled a fast one on Saturday ordering those in the list of shame to step aside including Simiyu. The said fake letter is dated March 26 2015 purportedly signed by Mutemu and addressed to the clerk national assembly (Ref EACC/DOC/KNA/16/2015).
Simiyu of late is alleged to have dumped his mentor DP William Ruto  and opted  for Baringo senator Gideon Moi who is also the chairman of the Senate committee on energy. 
At  Nock where Chirchir was overstepping his PS  Jospeh Njoroge, all CEOs under the docket of Energy ministry are happy that visits to Chirchir’s office are over. Chirchir’s name has featured prominently in the chicken gate scam.  EACC had refused to give him a clearance certificate only to get the job through connections.