FRAUD: KeRRA DG Kandie Sued In Sh1B Tender Scam Involving A Chinese Firm

A controversial road construction tender has landed in court, with Kenya Rural Roads Authority (KeRRA) Director General Philemon Kandie at the centre.

Kenya Insights has previously covered the tender in which the DG rubbished the credibility and integrity issues that were initially raised, saying that the tender was a done deal whether the due procedure was followed or not as he had the blessings of two powerful bosses in the high office.

A businessman has now moved to court seeking an injunction to restrain from awarding a Sh1 billion tender to a Chinese firm arguing that the tendering process was flawed.

Francis Kinyua Mwangi alleges in the court documents that the tendering process for the tender to upgrade several roads in Kisii County to bitumen standards, was conducted in violation of the Public Procurement and Asset Disposal Act.

The roads include Metembe-Owalo-Rioma, Marani-Ng’enyi/Tin’ga Bobaracho Ragogo Kegogi Nyakoora Rioma Gesieka – Nyaore Marani Roads.

Through lawyer Simon Mburu, the contractor told the court KeRRA invited bids from eligible construction companies for the completion of stalled road projects under Tender No. RWC 652, as part of the Roads 10,000 Program for the 2023/2024 financial year.

“I am is apprehensive of the conduct of KeRRA in shaping the tender process to potentially favor Shengli Construction,” Kinyua said in the court documents.

Kinyua perceives the intended re-evaluation of the bids, as communicated in the KeRRA’s letter dated 8th April 2024, to be insincere and merely cosmetic.

The lawyer said the re-evaluation process is designed solely to address the observations made by the Public Procurement Review Board, rather than genuinely ensuring fairness and transparency in the procurement process.

“The conduct of KeRRA amounts gross violation of Articles 10 and 227 (1) of the Constitution which outlines the national values and principles of governance, including integrity, transparency, and accountability and KeRRA has failed to uphold these principles by engaging in practices that undermine fair competition and transparency in the procurement process,” Kinyua told the court.

The project was to be financed by the Government of Kenya through the Development Vote, with an allocation of Sh100 million in the financial year 2023-2024.

However, he says the procurement process, including the invitation to tender, the evaluation of bids and the award of the contract, has been fraught with irregularities, non-compliance with the Act and blatant disregard for constitutional principles on prudent use of public resources.

The petitioner says KeRRA intends to award the tender to Shengli Engineering Construction (Group) Co, limited despite the there being another responsive bid by another company by the name Guangxi Hydroelectric Company.

He said the difference of the tender amount is more than Sh1 billion and awarding the tender to Shengli will result into the direct loss of taxpayer’s money.

“KeRRA has consistently during the procurement process of tender No RWC 652 used means and mechanisms of favoritism with the intention of giving unfair advantage to the 4th Respondent in an endeavor to ensure that the 4m Respondent is awarded the tender which is a violation of the Constitution and Public Procurement and Disposal Act,” says the contractor.

Lawyer Mburu revealed that in a letter dated 3rd April 2024 the Public Procurement Regulatory Authority while addressing the director General of the KeRRA made a litany of observation of constitutional and statutory violations in respect to the notification of award of tender to the Shengli Engineering which led to the decision to reevaluate the tender based on the observations raised by the Public Procurement Regulatory Authority (PPRA).

He adds that of concern, was the observation that a minor arithmetic error had led to the disqualification of an otherwise responsive bid from Guanxi Hydroelectric Limited. a company that had in fact deducted Sh 250,000.00 from its total bid amount and which decision was in contravention of Regulation 79 (2) (b) and Section 82 of the Public Procurement and Assets Disposal Act.

He adds that vide a letter dated 8th April 2024,KeRRA communicated its decision to re-evaluate the tender in line with the observation of the Public Procurement Regulatory Authority.

However the petitioner is apprehensive that the said exercise will not reflect the principles enshrined in the constitution and the Public Procurement and Assets Disposal Act and KeRRA is keen on awarding the tender to shengli despite the difference between the lowest responsive bid being over Sh 1 billion and which will result to loss of public funds through corrupt practices.

KeRRA in the letter dated 8th April 2024 has not addressed the issues of criminality and conspiracy noted by the director general of Public Procurement Regulatory Authority and therefore the same staff that were involved in the previous conspiracy are expected to arrive at a different decision which is not possible.

Article 227(1), which mandates that public procurement should be conducted in a manner that is fair, equitable, transparent, competitive, and cost-effective and KeRRA’s actions have compromised the integrity of the procurement process, allowing collusion and favoritism, thereby defrauding Kenyan taxpayers and violating the legal and ethical standards required by the Constitution.

The Public Procurement Regulation Authority the body with jurisdiction to deal with the matters relating to the tendering process established under Section 9 of the Public Procurement and Assets Disposal Act has through a letter dated 20th March 2024 indicated there exists a criminal enterprise within the staff of KeRRA.

The same has not been either prosecuted, nor confirmation of investigations having been commenced by the Ministry of Public works in respect to the conduct of KeRRA leaves this court as the only hope left for Kenyans in combating the corrupt practices that perverse the tendering process in respect to tender no RWC 652.

The actions of KeRRA amounts to violation of Article 46 (1), (c) which constitutional provision protects the economic interests of consumers of goods and services and more so in relation to services being rendered by the Shengli Construction upon award of tender by KeRRA.