Why the state loves breaking bidding contracts

The powers that be seem to have plenty of money to squander but none to spend on essential services. Even with a massive budget deficit, we readily find funds to pay off companies for reneging on contracts we had entered into but draw the line when it comes to setting aside money for health, education, security and other services.

Government officials can break a leg rushing to Treasury to process billions of shillings for some foreign entity that we have decided to stiff over a deal should be given to another firm. I will start in the recent past when some crafty fellows in government decided to give a contract to an Italian firm to build a dam in the great Rift.

The Arror-Kimwarer dam saga became the hallmark of what happens when we have people in government with no interest in the country at heart.

I don’t think anybody in government ever intended to build that dam, not even a pond. The project was commissioned; two decrepit excavators ferried on site to create an illusion of movement. Billions were paid out – an amount the president derisively referred to as small change – yet we all knew there was no intention of building a dam, even for cows in the neighbourhood. Now, apart from the money that we had paid the Italian contractor, we must pay back Sh23 billion loan borrowed for the scam.

Fast forward to 2022. When this new government took over, the first order of business was to cancel the Rironi-Mau Summit Road. The reason was the procurement was flawed, that the road design was wrong and that we needed more lanes for the busy road. The French firm was ejected and in came the Chinese. We had to pay the firm Sh7 billion compensation. And of course the re-design meant the contract value went up substantially.

I understand the Adani deal for the JKIA that went sour also had some severe monetary implications. We had to pay off the Indian firm for NOT delivering an airport.

The other day, there was an attempt by the government to take away the Likoni bridge project from JICA to some Chinese firm yet the Japs were the ones who had done all the heavy lifting. And so on.

The reason I have taken such a circuitous route is not only to lay out the waste the government appears to be in love with, but to express my sheer disgust at the wastage that has been perfected by it, without making any attempt to hide their intentions.

And somehow, the beneficiaries of the re-awarding of the contracts always happen to be – surprise, surprise! – the Chinese. I wonder why? Your guess is as good as mine. What however I know is that European and American firms have certain misgivings against giving kickbacks because the laws in their countries are clear on the penalties.

Again, shareholders would react violently if it came to light that certain third-world leaders have been compromised by their companies to give them a leg up in any contractual bid. I suspect the Chinese might not have such qualms.

One thing that has continually bothered me is the fact that we have never ever had a situation where a contract has been cancelled and, when it is re-awarded, the cost came down. Never. Ever. It always goes up exponentially, by billions of shillings for most of the projects that I know of. In other words, we suffer double jeopardy: on the one hand we compensate people for termination of the contract and then we inflate the new contract. It is sheer madness.

Time is nigh for the government to enact a bill that clearly states that no project should ever be cancelled just because a new government comes into power, unless there are clear and pertinent reasons to do so. And if such a thing happens, someone should be made answerable, including surcharging them for the lost money.

-The writer is a communications consultant