Nairobi Star (Nairobi)
Andrew Teyie
22 October 2009
Nairobi — Water minister Charity Ngilu has been asked to "reconsider the composition" of the entire board of the National Water Conservation and Pipeline Corporation after huge "mounting debts" which exceeded Sh750 million.
In a report exclusively obtained by the Star, the Efficiency Monitoring Unit in the Office of the Prime Minister accuses the board of supervising the near collapse of the corporation due to unexplained debts.
It recommends disciplinary action and in some cases surcharge against the former Managing Director J.K Muchemi; the head of procurement Ferdinand Musakhala; the Head of Finance Stanley Mombo Amuti; and the Head of Internal Audit Mr. Onguso as "culpable for the financial malfeasance and poor management".
Yesterday, Ngilu confirmed she was studying the report which she received last week and would soon announce the action needed to restore the corporation to a sound footing.
She said despite the problems at the corporation, the ministry was going ahead with the construction of five dams countrywide at a cost of Sh9.4 billion.
She dismissed reports carried in NTV that claimed that the cost of the dam's construction had been escalated and that there had been irregularities in the tendering process.
Coincidentally a fire at the Corporation's administration block on Dunga Road in Industrial Area on September 24 destroyed documents including payment vouchers and staff files. The fire was initially blamed on an electrical fault.
The EMU report focuses on the period prior to the 2007 general elections when large sums of money were paid out to contractors and suppliers without invoices or government LPOs.
Muchemi and Musakhala are accused of unilaterally awarding transport tenders without LPOs to companies belonging to directors of the corporation.
In one instance, the two authorised double payment for the corporation's hire of a truck for 30 days which eventually cost the corporation Sh1.8 million instead of Sh539,400.
The report also shows staff colluding with suppliers and contractors to fleece the corporation out of Sh24 million without invoices or LPOs.
For example, Direct Auto spares and Nassir Rabii general merchants which were paid nearly Sh4 million each were among a list of 31 companies cited in the report for receiving money without supporting LPOs or invoices.
"It is very difficult to ascertain whether the goods/services were actually delivered/rendered given the situation where invoices are raised without prior orders being issued," said the report.
It also raises questions about the tendering process and cites Water Africa Services Limited which was asked to quote for drilling two water boreholes in Makueni and Kajiado district without following procurement rules.
The report notes that in some instances, the tender secretariat misled the tender committee.
For example, the committee awarded a Sh1.7 million tender to Ostrich Development Services to undertake a baseline survey for corporation staff. The secretariat informed the tender committee that the company had been pre-qualified yet the minutes indicate that the firm was not among those pre-qualified.
The report states the Board of Directors were aware of the happenings at the corporation and chose to ignore it.
"The boards of directors were privy to the dire financial position of the corporation through the controller and auditor general report of June 30, 2007," the report says.
It adds: "The position was grim with negative working capital of Sh522 million, bank drafts of Sh17 million, bank charges of Sh1.2 million and an outstanding imprest Sh318 million." The report asks the Water minister to reconsider the appointment of former board members -Professor BNK Njoroge and Caesar Ngige Wanjao to the National Irrigation Board and Water Services Regulatory Board "respectively for their poor corporate governance and conflict of interest records".
Yesterday, Ngilu denied irregularities in the contracts for the five huge dams being constructed countrywide to collect 21 billion litres of water at a cost of Sh9.4 billion.
"These projects were designed and costed in 1998 while the actual work started last year. Any contractor would tell you that since 1998 costs of materials and labour have shot up. The tenders were above board. The minister is not a member of any tender committee anywhere. And no one has complained to the Public Procurement Oversight Authority," said Ngilu.
Maruba dam in Machakos, which is due for completion this year will cost Sh350 million and will have a capacity of 2.45 billion litres.
Umaa dam in Kitui which will have a capacity of 800 million litres will have cost Sh824 million by the time it is completed in January 2011.
Kiserian Dam in Kajiado, costing Sh989 million will also be completed at the same time will have a capacity of 1.2 billion litres and will cater for 124,000 people.
So far the contractor has been paid 196 million.
Badasa dam in Marsabit which will cater to the needs of 31,000 people and their animals is expected to cost the government Sh2.3 billion and will have a capacity of 5 billion litres of water.
By the time Chemusus dam in Koibatek district is completed in July 2012 it will have a capacity of 11 billion litres of water to cater for 840,000 people.
Ngilu said the target was to have 20 more dams established by 2020 giving the country 200 billion litres of water.
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