E-Clips:- Business Pictorial - Why State Nullified Suspect Deals Worth Sh22 Billion

Details of the four contracts worth Sh22 billion cancelled in the wake of the Anglo Leasing scandal were yesterday unveiled by the government.

Permanent secretary Dave Mwangi said most of them were started under the Moi administration – although it was true that some had been signed under the Kibaki regime.

However Mr Mwangi offered to resign immediately if anyone could provide evidence of fresh corrupt deals initiated by the current Government. He categorically refuted British High Commissioner Sir Edward Clays claim on Wednesday that "many stones remain unturned . . . many many stones" in the fight against corruption.

Sir Edward said he had handed President Kibaki a dossier of 20 new corruption scandals expected to cost the Government billions of shillings.

Mr Mwangi revealed that following the rumpus raised by the Sh7 billion Anglo Leasing deals involving a new secure passports system and the provision of forensic laboratories for the CID, the Government has cancelled four security contracts and suspended one valued at more than Sh22 billion.

But unlike in the case of the Anglo Leasing cases which led to the dismissals of three permanent secretaries and four senior civil servants, all those involved in the five new deals are still in office.

Mr Mwangi said that was because the decision to cancel or suspend the contracts was taken by the same department that had initiated them, and therefore it was not found necessary to sack or suspend any of the officials involved. All five contracts were initiated in the Office of the President as security projects under what is called special financing.

Two of them – known as E-Cop and Silverson Establishment – were awarded to firms associated with Mr Deepak Kamani who was also involved in the Anglo-Leasing transactions. The two contracts were valued at Sh13.2 billion.

E-Cop was for the supply of a hi-tech police computer communications system while Silverson was supposed to supply the Government with 500 Land-Rovers. As in the Anglo Leasing saga, three per cent of the total money involved – handed over as commitment fees – was wired back to the Treasury once the contracts were cancelled.

A third contract, valued at Sh800 million, involved Hyundai Motors Kenya Ltd, for the supply of 522 assorted Hyundai vehicles to the Government. Only 361 vehicles were supplied while the contractor, Mr Mohamed Karmali, has since been charged in court with fraud and the contract cancelled.

The fourth cancelled contract involved Team Simoco, formerly known as Philips Radio, for the supply and maintenance of police communications. The company had completed three parts of the four-phase contract worth Sh14 billion. Phase four of the contract, worth Sh3.4 billion, was cancelled following Anglo Leasing.

The suspended contract, codenamed Globaltel, was worth Sh4.9 billion and entailed a nationwide digital multi-channel security system for the provincial administration and Administration Police.

Before the contract was suspended, Globaltel had imported a huge consignment of equipment which is sill lying at Kilindini Port, Mombasa. The project has been referred to an inter-ministerial committee for further scrutiny.

However, the Government is still doing business with companies associated with Mr Kamani, despite the hullabaloo raised by the Anglo Leasing scam. One such company, Apex Finance Corporation, has obtained a Sh1 billion contract with the Government to supply and maintain police helicopters.

Confirming the cancellation of the four contracts and the suspension of the Globaltel deal, Mr Mwangi said that when the Anglo Leasing scandal became apparent, his office scrutinised similar contracts and recommended to the Treasury that some should be cancelled and others suspended.

The reason the contracts were cancelled, he said, was because it was found that as in the case of Anglo Leasing, no thorough checks into the companies, their directors and backgrounds, were completed before they were given the billion-shilling deals.

Mr Mwangis disclosures came in response to Sir Edward Clays sharp criticism of the Governments attempts to combat corruption.

As well as warning, "Many stones remain unturned . . . many many stones," Sir Edward told journalists gathered for an awards evening that the beacon of hope that the Narc Government had promised before the last General Election had over the last two years almost been extinguished.

He said he had sent a dossier of 20 new cases of corruption to President Kibaki and that they implicated at least four Cabinet ministers and centred on the way government departments have paid for goods and services. The dossier focused sharply on the Office of the President and specifically the Ministry of National Security, he said.