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Treasury agency spells end for tender cartels

By Frankline Sunday | January 14th 2019
Construction works on the Standard Gauge Railway's first phase at Emali. [David Njaaga,Standard]


The National Treasury will begin vetting long-term State contracts before allocating funds for them.

The move, scheduled to start in July, is the latest in the bid to weed out cartels that have reaped billions of shillings from opaque Government procurement processes.

It will affect tenders for the supply of goods or services as well as development projects that run several years by the national and county governments. This follows the establishment of the Public Investment Management (PIM) unit at the National Treasury that will oversee the selection, budgeting and management of development projects and public-private partnerships (PPPs).

“The PIM unit shall independently review large projects before they are included in the budget,” explains the 2019/2020 budget policy statement released by the Treasury last week. “This will ensure that priority projects are selected and implemented on time and within budget.”

The PIM unit is currently developing regulations that accounting units in national and county governments will be required to follow before presenting projects for budgeting and implementation. 

“The PIM regulations, as a minimum, will require that all projects ideas/concepts are subjected to the same quality assurance processes set out in the guidelines, thus ensuring all projects selected for funding have undergone an appraisal,” Treasury explains.

At the same time, projects that have received financing will be required to stick to the approved budget and timelines.

The creation of the investment management unit at the Treasury followed intense criticism against the Executive over the awarding of multi-billion-shilling tenders to single-sourced bidders, bypassing public scrutiny.

Last year, the Parliamentary Budget and Appropriations Committee recommended changes to the Public Finance Management Act, 2012 to give lawmakers the power to review tenders exceeding Sh1 billion to avoid single-sourcing.

“This committee is concerned that this House is only informed of large projects during the review of the budget,” said the committee. “International practice now demands a pre-approval of such projects by Parliament before they are tendered, thus we need to review the Public Finance Management Act 2012 to ensure this information is availed to this House at the appropriate time.”

The Government’s roll-out of several mega infrastructure projects in the past five years has been a source of friction between Parliament and the Executive.

Raw deal

For instance, the 11th Parliament, in 2013, took issue with the awarding of the Standard Gauge Railway (SGR) tender to China Road and Bridge Corporation,  with several MPs calling for the contract, then valued at 370 billion, to be scrapped and tendered afresh.

Recent revelations by the Government that taxpayers are coughing up to Sh30 million monthly in subsidising SGR operations have raised further concern that Kenya might have gotten a raw deal on the railway.

Last year, Parliament’s Transport Committee raised questions over the tender for the proposed Sh300 billion Mombasa-Nairobi expressway that was single-sourced to American construction firm Betchel, just weeks to the 2017 General Election.

MPs accused Treasury officials of failing to award the tender competitively and neglecting to conduct public participation sessions, contrary to the Public Finance Management Act, 2012.

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