E-Clips:- Business Pictorial - Graft Probe - Govt Halts Shs2.7b Contract

The Government has stopped the controversial Sh2.7 billion passports contract pending the outcome of investigations into the deal.

National Security minister Chris Murungaru said yesterday investigations into the project would be completed by the end of the week and the outcome would be made public "at the earliest possible time".

It moved to stem mounting public criticism of a contract for the purchase of passport issuing equipment, which was expanded from a Sh800 million project to one costing Sh2.7 billion then awarded to a French firm without competitive tender. MPs have cast the deal as corrupt, with one suggesting "someone pocketed Sh1 billion".

Yesterday, Dr Murungaru said legal action would be taken against any Government official found to have been involved in improprieties in the contract. "Let me assure this House that the Government is committed 100 per cent in the fight against corruption, and will not be involved in any cover-up," he said.

The minister, however, cautioned backbench MPs, who heckled him as he responded on behalf of the Government, against imposing guilt on individuals until investigations were complete.

He said: "I know that there are some MPs who will always think that others are guilty. A thief usually thinks that everybody else is a thief like himself."

The matter of the passport came up immediately after question time, when leader of the Official Opposition Uhuru Kenyatta, rose on a point of order to suggest that Parliament should discuss the issue as a matter of national importance.

Mr Kenyatta said that after consultation with Speaker Francis Kaparo, it had been decided that an intended motion of adjournment to discuss the matter be set aside to await results of a PAC investigation.

Questions over the contract centre on a decision by the Treasury to cancel a smaller proposal for which three reputable international companies had qualified, expanding it to one costing billions of shillings against opposition from the Immigration department then contracting a different firm without putting the procurement to tender.

Critics have pointed that none of the three firms shortlisted in the original tender were invited to bid for the new project, which was granted to the French printing firm Francois Charles Oberthur Fiducaire. Questions have also been raised about the financing of the deal by Anglo Leasing and Finance Ltd, which gave its address as Liverpool, UK, but after media inquiries, explained that it was based in Switzerland and operated only a representative office in the British town.

Mr Kenyatta told MPs that because of the interest the passport issue had generated, it was important to get assurance from Vice-President Moody Awori – who is the leader of Government Business – that the project would be halted until investigations are finished.

He also sought assurance from the VP, who is in charge of the Home Affairs ministry under which the passport office falls, that if proven that there was impropriety in the project, the Government would recover, or reclaim the Sh91 million already paid out to the firm that won the passport tender.

Mr Kenyatta also sought assurance that the report of investigations into the project ordered by Ethics and Governance permanent secretary John Githongo - which are running parallel to the one by the Public Accounts Committee - would be made public. He said: "Based on the information we have so far received, this scandal could turn out to be another Goldenberg." The Gatundu South MP said the Government could not afford to lose Sh3 billion in irregular deals as the money was needed to employ teachers and nurses.

Parliament, he said, could not wait until the Auditor-General brought its investigation report into the House for discussion next year, adding that MPs needed assurance that the Government was committed to fighting corruption.

Speaker Francis Kaparo said that when the matter came up in the House last week, the PAC requested the Controller and Auditor General to carry out immediate investigations into the issue and come up with a special report.

Owing to the urgency of the matter, Parliament had sent its Clerk to find out the Auditor General progress. Mr Kaparo said he had received assurance the special report would be handed over to the Finance Ministry today (Thursday). PAC expects the report from the Controller and Auditor General on Tuesday next week.

Mr Kaparo said Parliament also needed to know about the outcome of investigations by the Office of the President into the affair. The House would feel vindicated if the project was halted, pending investigations.

Dr Bonny Khalwale (Ikolomani, Narc) said Government officers involved in the project should step aside until investigations were complete as they could interfere. Mr Maoka Maore (Ntonyiri, Kanu) sought clarification, saying there was confusion as to who had won the passports tender.

Mr Kerrow Billow (Mandera Central, Kanu) asked why businessman Jimmy Wanjigi and a Mr Deepak Kamani, who had been mentioned in connection with the deal, had not been asked to record statements with the anti-corruption police. Earlier this week, PSs Joseph Magari and Sylvester Mwaliko and principal immigration officer Henry ole Ndiema were questioned over the contract.

Mr Billow, who is also the shadow Finance minister, said the Government should withdraw the passports of the two businessmen until investigations were over.

But Dr Murungaru said the Government would not act on the basis of newspaper reports. He said the aim of the ongoing investigations was to unearth all those behind the affair "if any" and take appropriate action.