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Saturday, June 13, 2015

Triple-threat to brokers from State House, Parliament and the National Treasury

QUICK READS:
• Powerful cartels, rogue suppliers, and brokers target budget billions
• Speaker says at least Sh300 billion exposed to theft, pilferage or wastage in procurement kickbacks, bribes.
• Speaker Muturi proposes one government department to do purchases for the whole government
• Treasury Cabinet Secretary Henry Rotich insists purchases must be done prudently, projects priced competitively and the law obeyed
• With 17 days left to the end of the financial year, Controller of Budget and Auditor General expected to give verdict on how public funds were spent
• President Kenyatta has sent a memo to MPs to tighten the new procurement law to license all agents


THE STORY: 

The Jubilee administration has embarked on a policy and legislative drive to lock brokers, cartels and wheeler-dealers out of big-money government contracts.

President Uhuru Kenyatta, Speaker Justin Muturi and Cabinet Secretary for the National Treasury Henry Rotich have rolled out the three-pronged attack to crush the well-connected powerful cartels that thrive on bribes and kickbacks to win government tenders.
On the day that President Kenyatta sent a memo to MPs with a directive for the National Assembly to tighten the new procurement laws to make sure that brokers and cartels that target big-money government contracts are not allowed to steal public funds, the Treasury CS and the Speaker all proposed tough measures that if implemented will forever change the procurement terrain in government.
The five-page memo to Speaker Muturi binds MPs to approve the provision that all brokers and procurement agents to government deals are registered and licensed. The whole idea is to make sure that the agents strike deals that benefits the procuring government entity.
"This clause seeks to regulate the behaviour of agents in procurement and asset disposal procedures and safeguard public resources," the Head of State noted in the changes that have to be included in the Public Procurement and Asset Disposal Bill, 2015.
MPs will have to raise a two-thirds majority (233 MPs) to overturn the drastic proposal.
The President's memo came on the day that the Cabinet Secretary for the National Treasury Henry Rotich said the goal of the new law and other rules on procurement is to "entrench efficiency in expenditure and ensure effective service delivery".
For the first time in a long time, Rotich becomes the first head of the public purse to try and force the government buy goods and hire services at market rates.
"We can achieve a lot more with the resources we generate if only every ministry and departmental agency applies budgetary allocations prudently," Rotich said.
To do so, he said, the e-procurement module that the President has been singing about, has now been rolled out. It has a price guide so that if any official tries to procure goods and services at an inflated cost, then, the system will send out an alarm.
"Value for money" Rotich said, is the ultimate goal, in his Thursday evening address to MPs.
Still suffering from the procurement-related scandals and litigation that rocked two of the flagship projects – the Standard One laptop deal (Sh17 billion), and the Standard Gauge Railway (Sh447 billion) —the Jubilee bosses at State House, Parliament and Treasury now insist that henceforth they will compare the cost of any multibillion deal with what is offered in the market, before they put pen to paper.
"Only projects that have been appraised and found to be viable and whose cost is within reasonable margins of similar projects in the private sector shall commence implementation," said Rotich.
For his part, Muturi says the national government's funds were exposed, to an extent that every year, the country loses between Sh300 billion and Sh400 billion to the brokers and cartels that target the procurement process to make quick and easy money.
"We have been getting the report of the auditor general year in year out. For the longest time, that report has been consistent that there's one place where we have had so much loss: it has been in the area of procurement. Can we think of ways of trying to minimise this," said Speaker in a meeting with journalists on Thursday night.
Muturi's proposal is to have one huge entity to handle all purchases for the whole government.
"Can we have a single buyer for the national government? So that in a way, everybody takes their procurement plans to that central place so that you minimise those people who want to negotiate and cut deals," said Muturi.
Anyone who needs anything, Muturi said, will have to send specifications to that entity and then "wait".
"If the military say they want war planes, let them put the specifications and the entity will buy. It will not be the military people going to negotiate. After all you can Google about some of these things," said Muturi.
In what he termed as a "wild" proposal Muturi said the entity will have to be guarded "perhaps by armoured personnel carriers and electronic transations" to minimise contact and therefore opportunity for brokers to extort or bribe to have the contracts inflated and swung their way.
Rotich agreed: "The objective of the Government Digital Programme is to ensure that all payments to government are made electronically so as to significantly reduce administrative costs, minimize leakages and expand access to payment points."
If the powerful triad at State House, Parliament and at the Treasury agree, then life will be difficult for the brokers.
Ends!



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