What Public Procurement And Disposal Act Says

What Public Procurement And Disposal Act Says

The Public Procurement and Disposal Act, 2005 prescribes procedures and sets standards for public entities to ensure that procurements and disposals maximise economy and efficiency, promote integrity, competition, fairness and inspire public confidence.

The Act however has obvious lacunae and various provisions which are mutually inconsistent. These gaps and contradictions undermine certainty and ultimately the good objectives of the Act.

While the Preamble to the Act provides that the Act applies among other things to disposal of "assets" of a public entity, the substantive provisions of the Act limit applicability of the Act only to disposal of "unserviceable, obsolete or surplus stores and equipment" (S2, S4(d), and S 126).

The Act defines "procurement" by a public entity to include acquisition of real property. However, by limiting "disposal" under the Act to disposal of unserviceable, obsolete or surplus stores, there is a serious lacuna about how real property procured by a public entity is to be disposed of under the Act.

These provisions lead to an undesirable position where a public entity is obliged to follow the Act in procuring real property, but it is free to ignore the Act when disposing of that real property, since real property is clearly not "unserviceable, obsolete or surplus stores and equipment".

Even if the grand Regency Hotel was ultimately transferred and registered in the name of the Central Bank of Kenya, the Bank could have easily circumvented the Public Procurement and Disposal Act in the disposal of the Hotel on ground that the Hotel is not unserviceable, obsolete or surplus stores and equipment.

The Public Procurement and Disposal Act should urgently be amended to remove these gaps and uncertainities.

CENTRAL BANK OF KENYA ACT

In line with accepted international best practice, the Central Bank of Kenya Act, Cap 491 seeks among other things to guarantee the autonomy of CBK particularly in the formulation of monetary policy.

While this objective of the Act is readily understandable and must be safeguarded, nevertheless the relationship between the Governor and the Board of CBK in practice leaves a lot to be desired.

S. 13 of the Act constitutes the Governor the chief executive officer of the Bank, its principal representative and the person responsible for its management. S 11 and S 12 constitute the Governor a member and the chairman of the Board of Directors and vest in him the responsibility for convening the meetings of the Board "not less than once in every two months, or whenever the business of the Bank so requires, or whenever he is so requested in writing by at least three directors".

The functions of the Board include "keeping under constant review the performance of the Governor in discharging the responsibility of that office (S. 10 (d) and "keeping under constant review the performance of the Governor in ensuring that the Bank achieves its objectives" (S.10 (e).

From the evidence, the Board of CBK was given very sketchy information about the disposal of the Hotel. We have noted that at the level of management the sale of the hotel was handled exclusively by the Governor and Mr Abuga. The role of the Board was reduced to that of ratifying decisions of these two officers.

With the current set up and practice, it is very doubtful whether the Board can effectively discharge its statutory responsibilities to review and check any excesses of the Governor, who happens to be its chairman.

The Judicial commission of Inquiry into the Goldenberg Affair (The Bosire Commission) expressed similar concerns about the relationship between the Governor and the Board (Para 833) and we regret to note that its recommendations in this respect, which we share, have not been acted upon.

The Commission has noted that the Draft Constitution, 2005 had made elaborate provisions on the Central Bank, which would go a long way to address the shortcomings noted about the management of the Bank. The Constitution created the CBK and spelt out its functions. The qualifications for appointment as Governor were spelt out (unlike under the current position) and the Governor and the members of the Board were to be appointed by the President subject to the approval of Parliament.

The Commission recommends adoption of the arrangement proposed in the Draft Constitution.