A letter written by Kenyans to President Uhuru Kenyatta and Kenya Trade Network Agency (Kentrade) Chairman Suleiman Shahbal has revealed that the CEO of the institution Amos Wangora could be in the process of stealing more than Ksh1.2 billion from the institution in dubious expenditures.
Wangora who is on a three-year contract followed the footsteps of his predecessor Mr Alex Kabuga who was forced to step aside for single sourcing Single Window System (SWS) project from a Singapore company, which had been blacklisted by the Ethics and Anti-Corruption Commission (EACC).
“World Bank which had initially committed funds for the Single Window System pulled out when Kentrade insisted on single sourcing the system from a private company in Singapore called CrimsonLogic. In the whole process, Mr Alex Kabuga, the former CEO, was forced to step aside for investigation because there was no proper justification for single-sourcing and the Government of Kenya wasn’t given room to negotiate the cost of the software,” reads the letter in part.
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Unfortunately Kabuga passed on before this matter could be investigated. In this single-sourcing procurement process, neither Office of Attorney General nor National Treasury was involved in the negotiation process. The cost of the project was inflated to Ksh1.1 billion.
Reportedly, the software is in 20% usage, because most components procured are duplicated with what is in use at Kenya Revenue Authority’s Customs Management system and Kenya Ports Authority system called KWATOS.
This is despite Head of Public Service issuing guidelines meant to avoid duplication, wastage and irregularities in acquisition of systems acquired irregularly and through single-sourcing.
Kentrade’s own strategic plan required management to have developed capacity to build a single window system locally in order to eliminate the high cost of getting the system from Singapore. Kentrade ignored this and chose to continue paying CrimsonLogic over Ksh100million every year for 7 years.
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“We have talented Kenyan developers who can build a single window for much less than what Crimsonlogic asks for and we would also own the source code,” continues the letter.
Public Procurement Oversight Authority (PPOA) had raised red flag on the procurement of the Kenya Electronic Single Window through a memo dated 15th August 2012 and several procurement irregularities at Kentrade and the former Board of Directors never took any action.
EACC initially declined to give clearance to Mr Wangora for the CEO’s position which was advertised in 2016 but later provided the same after intense pressure from some BOD member Mr Joseph Zachariah Ngugi. (who is member of Kentrade Board and alternate Director for Permanent Secretary – National Treasury) at National Treasury. EACC stated that Mr Wangora had pending cases which waiting investigation, one of them being mismanagement of funding for Single Window Project from National Treasury and Investment Climate of Africa (ICF).
Six years since the system was procured, Wangora is seeking to purchase a new system for Ksh1.2 billion, from the same company.
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Through a single-sourcing Kentrade is currently procuring a new Single Window System without going through a competitive bidding process as prescribed in Public Procurement and Disposal Act 2015. It is known that that the system he wants to acquire is new and not an upgrade as he claims.
“The single-sourcing process which was initially used to illegally procure Single Window System (in 2012) is being currently being repeated by Mr Wangora to procure another Trade Facilitation System in the name of Single Window,” continues the letter.
Mr Wangora, being the crafty and cunning government official, presented this report to Board of Directors, requesting them to approve it as “upgrade” of Kenya Electronic Single Window. However looking at the proposal given by Crimsonlogic dubbed Trade Facilitation Platform, this is a totally different system/software from what was originally procured. The big question is, how can an upgrade cost the same price as the original software?
The taxpayer is going to spend almost Ksh1 billion on a software which is not needed and whose functionalities are already being done by KRA Integrated Customs Management System (ICMS) and KPA KWATOS.
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More intriguing are demands tabled by Crimsonlogic that Ksh200 million is paid upfront to them for the software and Ksh100 million per year for the subsequent seven years, just like the 2012 system. It sounds like a contract renewal.
The new deal was done without involving the Board of Directors and the National Treasury.
In the same pursuit to subvert the competitive procurement process, Mr Wangora approved formation of a task force through an internal memo dated 14th March 2017. The Task force members, according to the memo constituted strictly staff members. However, in the final report, the vendor (Crimsonlogic) was included in the taskforce undertakings to “guide” the process of recommending a new Single Window System.
This is evident in the Final Taskforce Report which was authored by the vendor members as having contributed in finding the ‘solution’. It is evident from the Taskforce Report and subsequent contracts already signed, that the vendor proposed themselves and their solution to Kentrade.
According to experts, Kentrade is paying almost four times what the competitive market offers. Rwanda spent only Ksh300 million to procure Single Window System.
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“Government of Kenya, through Kentrade bought components it never needed (e.g. Declaration Module, Cargo Release Module, Manifest Module etc because all these functionalities are being handled by Kenya Revenue Authority and other Agencies). Why procure a new system when the previous one is in 25% usage?” poses the letter.
It is also worth noting that The Government of Singapore, which also running a Single Window, actually awarded a similar tender for supply and maintenance of the Singapore Single Window System to Accenture because Crimson Logic’s bid was overpriced.
Currently, National Treasury despite allocating seed money amounting to Ksh300 million is not involved in the procurement process of a new Single Window System which the Kenya trade environment does not need. Whereas this leads to poor oversight on part of National Treasury considering the amounts involved, the whole stage-managed process looks intentional considering that Mr Joseph Zachariah Ngugi from National Treasury, is a member of Kentrade Board of Director, and also being the one who recommend this option (pointing to another instance of abuse of office by an official from National Treasury).
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