By Amos Kareithi

When a severe drought recently gripped the country killing thousands of animals and leaving many pastoralists as paupers, a cabal of merchants were taking advantage and posting super profits.

They made a killing from the drought by selling drugs and animal feeds to the Ministry of Livestock Development at highly inflated prices.

Some of the drugs sold to the ministry were inflated by as much as 1,000 per cent.

This scandal was hatched shortly before the implementation of Drought Recovery Programme in September. The drought had devastated the arid and semi arid lands, whittling away as much as 40 per cent of the livestock population.

The scam targeted Sh400 million released by the Ministry of Finance in September to the Ministry of Livestock Development. The department of Livestock Development and that of Veterinary Services shared the funds equally.

Some of the livestock that died during the drought. Government officials connived with merchants to inflate prices of drugs and other supplies meant to mitigate effects on drought. Photos: File/Standard

The money was set aside by Treasury under the drought recovery programme to purchase veterinary drugs and supplementary feeds to mitigate against the adverse effects of the drought in the arid areas.

Earlier in April this year the ministry was embroiled in another Sh420 million scandal after some merchants sold a Pestes des petits (PPR) vaccine at Sh30 per dose. The vaccine had been sourced from Ethiopia by a private company for Sh7 per dose.

PPR was first detected in Turkana in 2006. By last year it had spread to the whole of North Eastern, North Rift parts of Coast and Eastern Provinces.

"Before the ministerial tender committee board met, a team of experts was dispatched to the field to establish the prevailing market prices of drugs and feeds the Government intended to buy," a source privy to the tendering process told CCI.

Thereafter, the ministerial tender committee met on September 18, at Kilimo House, the ministry’s headquarters, and awarded contracts for supply of drugs and supplements to mitigate against adverse effects of the drought.

The tender committee was chaired by Mr A K Cherop, Deputy Veterinary Director with Mr J M Musau, Chief Procurement Officer as the secretary. Other members of the board were Dr Jactone W Jalango, Deputy Director of Veterinary Services, Mr S C Yeggon, Deputy Director of Livestock Production, Mr J K Mwangi Chief Accountant and Mr Moses Mburu.

The tender committee discussed tender for purchase and delivery of assorted supplementary feeds to divisional livestock production headquarters.

The same committee awarded contracts for the supply of drugs and feeds, which were to be supplied to farmers in 38 districts where the animals were in danger of being exterminated by drought.

A source familiar with the tendering procedure who requested anonymity as he is not authorised to speak to the press intimated that the price guidelines were ignored by some members who conspired to exploit the Government.

The tenders were awarded to companies, which had highly inflated the prices even though the tendering board was aware of the prevailing market rates of the drugs.

In one of the most glaring cases, Albendazole 10 per cent, a dewormer, was sold at Sh7,675 per litre making it one of the most expensive veterinary drugs in the country.

Ironically, investigations by CCI show that bought over the counter, some brands of this drug go for as little as Sh700.

A veterinary surgeon in the ministry who asked not to be named for fear of victimisation whom we contacted to comment on the pricing was aghast: "There is no way that dewormer can cost that much. Why? There must be a mistake. I recently bought a litre for Sh800. Something is not adding up."

When we called some companies selling veterinary drugs, we learnt that Albendazole was being retailed at about Sh1,715 on average.

The Government was supplied with a total of 12,000 litres of the highly priced dewormer, at a total cost of Sh92 million. Had the Government bought the drug at the current market rate, it would have spent Sh20.6 million, saving Sh72 million.

Interestingly, all the nine companies competing for the contract had quoted rates above Sh7,000. The winner was the lowest bidder. The highest bidder had quoted a price of Sh7,985 per litre.

At the same time, a tick control chemical, Dominex was supplied to the Government at Sh7,784 per five-litre pack. The Government ordered 600 packs and paid Sh4.7 million.

Our investigations show that Dominex is normally retailed at about Sh2,000 for a five-litre pack. This means that the Government would have spent Sh1.2 million or less instead of the Sh4.7 million it paid for the tick control chemical.

CCI established that the Government was also duped into buying 500 litres of Amitrax at Sh3,260 per litre , spending Sh1.63 million. CCI survey established the drug retails at Sh1,600 per litre.

The ministry also bought 80,000 sachets of 2.36 grams Berenil at Sh95 per sachet, spending a total of Sh7.6 million. CCI investigations showed the drug retails at Sh65 per sachet in the shops.

In another case, a total of 2,192 litres of levamisole were sold to the ministry at Sh2,050 bringing the total cost to Sh4.4 million. CCI survey in the market showed that a five-litre pack is retailed at an average of Sh1,200.

The ministry also bought 230,000 doses of Anthrax vaccine, Blanthrax at Sh23 per dose although it normally retails at Sh7 per dose. This cost the taxpayer Sh5.2 million instead of at least Sh1.61 million.

It also bought disposable needles at Sh27.50 per piece while syringes were bought at Sh35. CCI’s survey in the market show that the two items combined cost less than Sh5. The Government bought 40,000 pieces at a total cost Sh1.2 million in a deal that would have cost at least Sh200,000.

CCI investigation established that the drugs would have been much cheaper if they had been sourced directly from the manufacturers.

Panic has now gripped some people within the ministry in the departments of procurement, supplies and accounts after it emerged that some senior employees had been secretly trading with the Government, while others fronted companies operated by their cronies.

Sources within the ministry indicated that the rot has been so entrenched in some areas that some merchants had been given leeway to carry their own files from office to office as they chase for their payments.

"Some of these merchants who have been doing deals with the Government have formed a habit of literally carrying Local Purchase Order (LPOs) and Local Supply Orders as they chase for signatories. Some officers too have formed their own companies which they use to sell goods and services to the Government at inflated rates," a source privy to the dealings told CCI.

In August, the issue was raised in a memo CCI has seen authored by the ministry’s Permanent Secretary Kenneth Lusaka. The memo, which was addressing issues on poor handling of accounts documents, was addressed to the Chief Procurement Officer and the Principal Accounts Controller.

"It has come to my attention that some of you are giving unauthorised persons (merchants) accountable documents most notably quotations, LPOs, and most unbelievably payment vouchers. These people move from office to office in pursuit of your signatures," the memo reads.

The memo warned those who continued to violate Government procedure of severe disciplinary action.

"I have already issued a circular instructing the officers concerned to screen all vouchers submitted for payment. I want to make sure that no bogus claims in respect to the drought recovery programme are paid. Vouchers relating to the off-take will be thoroughly scrutinised before they are paid," the PS told CCI.