E-Clips:- Business Pictorial - Contract To French Firm Highly Irregular

The Sh2.7 billion single-sourced passport system procurement saga currently raising a storm is certainly not the only one of its kind since the Narc Government came into power. These things did not end with Kanus defeat.

For instance, barely three months after Narcs landslide victory, the Kenya Civil Aviation Authority (KCAA) awarded a euros 6.5 million (Sh611 million) contract to a French company, Sofreavia, without competitive bidding. The contract for supply and automation of Aeronautical Information Services (AIS) systems was signed on April 11, 2003, by the KCAA director-general, Mr Chris Chirchir arap Kuto, without the participation of the Transport and Communications Permanent Secretary or that of his Treasury counterpart. It under Mr John Michuki watch as the new Narc Minister for Transport and Communications.

Surprisingly, the French company had been awarded the same AIS contract several years earlier and had performed abysmally. Despite the earlier debacle, Sofreavia was getting the same contract again without any competition.

A precedent had been set earlier with the five-year Kenya Air Traffic Management Modernisation Project (KAMP), awarded by the former Directorate of Civil Aviation (DCA) to another French company, Thomson CSF, now Thales ATM, in 1998.

The Sh1.1 billion project to modernise air traffic management infrastructure was soon varied upwards to Sh1.5 billion. Another variation in June 2002, added an extra Sh980 million.

Hence, a Sh1.1 billion project was, over four years, varied upwards to Sh2.5 billion, more than double the original value, without further tendering.

With the Narc victory, such single-sourced contracts were expected to become a thing of the past. Such were the expectations when Michuki, a 1960s Treasury Permanent Secretary, and later long-serving executive chairman of the Kenya Commercial Bank, was appointed the Transport Minister.

However, less than four months into Michuki tenure, Mr Kuto single-handedly awarded the contract. Sofreavia had in 1996/97 been awarded a contract to automate the AIS network linking Jomo Kenyatta International Airport (JKIA), Moi International Airport, Mombasa, and Wilson Airport. By 2000/2001, the system had completely failed for lack of after-sales support.

The Directorate of Civil Aviation was faced with the task of replacing the entire system. But there was one formidable problem. The Treasury was bound to question the need to completely replace a system installed less than five years earlier.

To circumvent the Treasury foreseeable objections, a project disguised as "rehabilitation" was drawn up by DCA and Sofreavia. This way, both DCA and Sofreavia hoped the Treasury would not raise too many objections.

Still, the Treasury was not fooled. Some time in late 2002, the Treasury Permanent Secretary wrote to his Transport and Communications counterpart questioning DCAs intention to spend such an inordinate amount of money on "rehabilitation". Besides, why not put the project out to tender?

The matter remained in abeyance as the year wore on. Meanwhile, Parliament passed the Civil Aviation Amendment Act 2002, creating KCAA in place of DCA. While DCA had been a department of the ministry, KCAA was to be an autonomous body with a board of directors. Such was the state of affairs when, in December 2002, Kanu was swept out of power by the Narc juggernaut.

In the euphoria following the Narc victory, a 24-seater Gulfstream 159 aircraft crashed on take-off from Busia airstrip, killing Labour and Manpower Minister Ahmed Khalif, both pilots, and seriously injuring eight other passengers, five of them ministers. A critically injured survivor remains in a coma 15 months later.

As the nation mourned, Michuki appointed a commission of inquiry to investigate the cause of the accident, later expanding the commission mandate to include an examination of the operations of KCAA and DCA. Three months later, the Commission of Inquiry into the Busia Air Crash led by senior counsel Lee Muthoga, handed to the minister a damning report.

Besides identifying the probable cause of the fatal accident, the commission found the operations of the former DCA and its successor had been seriously compromised by an entrenched culture of corruption and inefficiency. This culture had greatly impaired air safety standards in Kenya.

Specifically, the commission uncovered evidence of fraud in the procurement of the Instrument Landing System (ILS) at Jomo Kenyatta International Airport (JKIA), a voice and radar data recording system, and a host of other air navigation equipment acquired during the previous five years. The Muthoga commission report recommended thorough investigations to establish how the fraudulent procurements were executed.

However, two weeks before Muthoga handed in his report, the euros 6.5 million contract was awarded in a manner similar to the earlier contracts the commission wanted investigated. How was Michuki to investigate the earlier contracts when he had just allowed an equally irregular contract to be awarded?