Ministry on the spot over Sh340 million irregular payment

Tourism PS Safina Kwekwe when she appeared before the National Assembly Public Accounts Committee on audit queries at Parliament yesterday. [Boniface Okendo, Standard]

The taxpayer will be forced to shoulder Sh340 million in interest as the government through the Ministry of Tourism has failed to settle a Sh12 million contract obligation since 2004.

The Sh340 million is part of the accrued interest since 2004 in a contract awarded to Telenews Africa and Atlantic Region to undertake consultancy work and services in respect to advertising and promotion of business opportunities in Kenya.

At the time the tender was awarded, advertising and promotion of business opportunities in Kenya was under the Ministry of Trade.

However, the State Department for Tourism has been under various ministries since President Uhuru Kenyatta's administration in 2013. At some point the department was under the Ministry of East African Affairs, Commerce and Tourism.

The continued payment of the interest to Telenews was flagged off as an irregular payment by the Auditor General in the year under review ending June 2018.

Yesterday, the National Assembly Public Accounts Committee (PAC) hard-pressed Tourism Principal Secretary Safina Kwekwe why the government has continued to pay Telenews Africa that has so far gobbled Sh285million with a Sh67 million still pending.

“Don’t you read mischief in this? Aren’t you disturbed? This is a serious matter because the Kenyans continue to pay money for a mysterious contract,” posed Wandayi.

In her submission, before the Opiyo Wandayi (Ugunja) led committee, Kwekwe said that as a ministry they are also disturbed with the amount that the Auditor General keeps flagging off as a pending bill over the years.

“We are disturbed that is why we want it conclusively addressed. It is painting us in bad light. The State Department has sought direction from the Solicitor General on the possibility of transferring the matter to Trade where we feel it rightly belongs,” said Kwekwe.

However, the proposal to request Solicitor General to intervene drew sharp reaction from the MPs with Otiende Amollo (Rarieda) explaining that transfer of such a function is not the prerogative of Solicitor General.

The committee has now invited the then Trade Minister Dr Mukhisa Kituyi, the contractor Simpson Senda wa Kwayera and any other person of interest familiar with the contract.

And apart from that, the committee has demanded that Ms Kwekwe should furnish it with the original contract, decree, the court orders, and the advisories from Attorney General, the letter from Ministry of Trade extending the contract to third phase and any other correspondences the Ministry might have had on the same contract.

Sometime in 2004, Simpson Senda Wa Kwayera trading in the name and style of Telenews Africa and Atlantic Region was contracted by the then Trade PS where Kwayera was awarded a tender to undertake consultancy work and services in respect to advertising and promotion of business opportunities in Kenya.

The project was undertaken by Kwayera in three phases and subsequently issued with government Local Purchase Order (LPO) for Phase I and II which was finalised and settled.

Although the contract ended on June 9, 2004, the firm continued advertising.

During the same year in August, the Ministry of Trade and Industry wrote to Pending Bills committee regarding non-payment of Sh12million claim for Telenews.

The Attorney General wrote advising the then Ministry of Trade and Industry was obligated to settle the claim since the then Minister had agreed.

However, the Public Procurement Oversight Authority vide letter dated April 23, 2007, observed that the matter should be referred to the Pending Bills Committee.

On December 16, 2011, observed that although there was no formal contract for phase III correspondence between Ministry of Finance, Trade and Industry and the State Law Office will be relied upon to form the basis of a contract and advises the Ministry of Trade to pay the contractual sum but negotiate on the interest payable.

The Ministry of Trade vide a letter to the Solicitor General reiterates that there was no contract for Phase III and also observes that the matter is under consideration with the Pending Bills Closing Committee.

“We have made a total payment to-date amounts to Sh285million. We will need the Attorney general to advise on any outstanding amount to date since March 4, 2020, the lawyer of the claimant –Kwayera had indicated that the amount due is Sh67.7million,” said Kwekwe.