Home General EPZA on the spot over tenders, illegal payments to contractors

EPZA on the spot over tenders, illegal payments to contractors

by kenya-tribune

The procurement authority has unearthed irregularities in tenders awarded by the Export Processing Zones Authority and fraudulent payments to contractors.

The Public Procurement Regulatory Authority wants EPZA chief executive office George Makateto to explain a number of issues raised in the probe.

EPZA chairman Paul Gicheru has been spearheading a grand housecleaning at the parastatal at the centre of industrialisation, one of President Uhuru Kenyatta’s Big Four agenda.

Gicheru’s board had earlier kicked out three top officers, including long-serving corporation secretary Maria Ouya.

In a letter seen by the Star, the PPRA details gaps showing taxpayers may have lost huge sums. For instance, it says the authority irregularly awarded tenders to firms and in other cases varied contract sums without proper justification. Thomas Otieno signed the letter for the director general.

Read: EPZ clothing companies extend exhibition, cite increased demand

In the award of the tender for the proposed construction of water infrastructure, the authority bosses made double payments to M/S Hirola Investments Ltd in two separate payment vouchers.

In the first payment, they used one voucher to pay Sh59,402,606 and Sh53,462,346. The voucher, PV109891, is dated June 29, 2016. This means the PPRA paid the company Sh113,065,052, raising fears funds could have been lost.

The suspect transactions were made during the tenure of former CEO Fanuel Kidenda, who was kicked out by Industrialisation CS Peter Munya.

In the second payment, the authority used two vouchers, PV107595 and PV107544, to pay Hirola on August 14, 2015, Sh45,260,395 each. On this payment alone, the EPZA paid Sh90,520,790 — double the amount that was to be paid.

The PPRA also questioned why the EPZA varied the tender by Sh74,420,214 against the law, raising the cost from Sh310,008,576 to Sh384,684,454.

It also raised queries in the award of the tender for the construction of an extended road network for Sh146,271,981 against a budget of Sh60 million.

The EPZA has also been put on the spot for executing the contract with M/S Aridlands Construction Company Limited without a performance bond as required by law.

In an investigation report, the PPRA said the tender was awarded even when it was clear no firm qualified at the evaluation stage to proceed to the technical and financial evaluations.

The EPZA was questioned for awarding a tender for the construction of access roads at the Kenya Leather Park Kenanie to M/S Marccan Contractors Company Ltd for Sh120,036,496 and varying the contract by Sh26,075,000.

“There was no evidence provided for the contract variation and head of procurement professional opinion,” the report says.

In the construction of a perimeter wall at the Ath-River EPZA, the PPRA questioned why the authority awarded the tender for Sh165,281,886 against a procurement plan of Sh70 million.

The tender was awarded to M/S Atticon Limited, but the firm is accused of doing shoddy work.

The PPRA also wants explanations on the Sh150 million tender for the decommissioning of a dumpsite awarded to Marnn Contractors Ltd.

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