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Tanzanian minister calls time on procurement corruption


SupplyManagement

28 June 2013 | Adam Leach

The United Republic of Tanzania plans to review its procurement legislation to close loopholes that make it possible for corrupt officials to profit from the public purse.

Addressing parliament this week, minister of state Stephen Wassira, pledged to take action to ensure items could not be purchased at inflated prices under the law, which results in unreasonably high profit margins for suppliers. As well as helping to reduce corruption, he said the more robust rules would boost competitiveness among businesses looking to supply to government.

Announcing his intention, Wassira, said: “The time has come to review the law. You can hide under the law and steal according to the law. If we do not act now and [instead] let corruption thrive, everything we buy or make will be substandard. And if we continue like this we will erode development.”

Around 70 per cent of the country’s development budget will be channelled through public sector procurement. The minister used this to strengthen the case for ensuring regulations are tight and robust.

Iranian bidder sparks halt to $2 bln Uganda dam project


Reuters Africa

September 7, 2012

By Elias Biryabarema

KAMPALA, Sept 7 (Reuters) – Uganda has halted plans to develop a $2.2 billion hydropower dam after objections were raised over the short-listing of an Iranian company in potential contravention of international sanctions, a procurement official said on Friday.

Billed as one of East Africa‘s largest infrastructure projects, construction of the 700 MW Karuma dam on the Nile river was expected to begin by the end of this year aimed at overhauling the east African nation’s stuttering energy supply.

“We received petitions by a whistleblower and representatives of other companies which were left out who said one of the firms that prequalified was an Iranian (firm),” said Vincent Mugaba, spokesperson for Public Procurement and Disposal of Public Assets Authority (PPDA).

“The Iranian company would not have the capacity to conduct international trade in light of sanctions imposed on Iran so we have halted the whole procurement process until we complete an investigation into the matter,” Mugaba said.

Washington and Europe have imposed sanctions on Tehran over its disputed nuclear programme. Some of the sanctions make it difficult for other countries to trade with Iran.

Mugaba said PPDA had requested the energy ministry, which is managing Karuma’s procurement process, to explain why it had overlooked the impact of sanctions on the Iranian company, Perlite Construction.

“What happened was that when we prequalified the Iranian company the U.S. sanctions had not come into effect but of course we realise that the company might have problems executing the contract if its bid was to be successful,” Yusuf Bukenya-Matovu, a public relations officer at the energy ministry, told Reuters.

“Uganda isn’t bound to respect U.S. unilateral sanctions but nevertheless there are implications. Perhaps there would be problems if the Iranian firm were to win but we’ll cooperate with the PPDA investigation,” he said.

LATEST DELAY

The Karuma dam is expected to more than double the country’s total power output. The state-run Electricity Regulatory Authority says Uganda produces a total of 550 MW while power demand at peaks stands at about 480 MW.

The snag was the latest to stall progress on Karuma, which the government is banking on to help prevent persistent power outages that have put a strain on the economy and discouraged investors from pouring more money into the oil-rich country.

Several years ago, a Norwegian investor that had expressed interest pulled out because it failed to secure funding for the project.

The Ugandan government wants to develop Karuma as a public-private project with the private investor as lead financier.

Uganda is keen to woo investment in its cash-starved energy sector to rapidly increase its generation capacity and in October plans to start pegging power tariffs to changes in inflation, international fuel prices and the exchange rate to make the sector more attractive.

Energy officials say the internal rate of return for energy projects in Uganda is fairly attractive at between 15-18 percent and higher than South Africa’s 12-14 percent, although the country has a higher risk perception.

Commercial hydrocarbon deposits were discovered along the Albertine rift basin along its border with the Democratic Republic of Congo in 2006 and reserves are estimated at 2.5 billion barrels. (Editing by Yara Bayoumy and Jason Neely)

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Kenya: Maintenance of roads to cost Sh9 billion


The Star

February 28, 2012

The Kenya National Highways Authority will spend Sh9 billion for routine maintenance of major roads this financial year. Of this, 80 per cent of the contracts have already been awarded, in a bid to ensure that Kenya’s highways are maintained to international standards, said KeNHA director general Meshack Kidenda. “We have distributed the road maintenance budget to all parts of the country. We will no longer tolerate shoddy road works,” Kidenda said in a statement.

At the same time, Kidenda said the authority has complied with all procurement guidelines as set out by the Public Procurement and Oversight Authority. “Apart from the PPOA, we are under constant audit from the ADB (Africa Development Bank), the World Bank and the European Union. We are happy to report that we are in full compliance to these guidelines,” he said.

The Director General said KeNHA has awarded more than 1,500 major tenders since inception, and none has been overturned by PPOA over procedural issues. “Only four contractors have appealed against tender awards from this authority. And in the four cases, we have gone ahead to win the appeals, a move that vindicates our tender committees,” said Kidenda.

He said KeNHA is benchmarking itself with its counterparts in the developed world, adding that the authority is on the path to becoming a centre of excellence in public procurement. “We want to perfect the system through the introduction of best procurement practices. We are constantly in touch with PPOA to ensure that this milestone is achieved in a year’s time,” he said. On delays in paying contractor certificates, Kidenda said road contractors are paid within 48 hours once the money has been released from the Treasury and Kenya Roads Board.

However, he said only certificates that are certified by auditors and project engineers are paid within that period. “We have devised a check-back system to ensure that all the procurement processes are transparent. At no time do we compromise on this,” he said. However, Kidenda said there is need to continually review the PPOA Act, in line with rising inflation trends and other developments in the country. He said the tender committee threshold of Sh500,000 was on the lower side, especially for road contractors.

Meanwhile, KeNHA has appealed to the public to stop vandalising road signs and bridges, adding that the move is a major setback to road safety. Kidenda said vandalism of road signs has increased in the last three months and there is need to stop the vice. A case in point is on Mombasa Road, near General Motors, where vandals have looted the safety grills, leaving motorists exposed.

Tanzania plans a railway line to reach South Sudan


The East Africa

By Leonard Magomba

February 18, 2012

Tanzania, Uganda, Burundi and Rwanda have reached a formal agreement to construct a multi-billion dollar railway network, which would also serve South Sudan and tap into the bloc’s growing trade.

The project, to commence in 2014, is expected to take three years and cost $4.7 billion.

This will run alonsgside the $3 billion Tanga-Arusha-Musoma-Kampala railway line that is expected to be completed by 2015.

Tanzania and Uganda signed an agreement with China Civil Engineering Construction Corporation to undertake a feasibility study and implementation of the project, which will be the main gateway of Mwambani Port in Tanga, Musoma dock and Port Bell in Uganda.

“We are expecting to handover the feasibility study by April while construction of the 880km railway line is expected to be completed by 2015.” the Chinese engineering firm managing director Wang Xiangdong said,

Mr Xiangdong said the railway line will be constructed to the 1,435mm, which is the standard gauge used in other countries and directed by both states.

The project will see Tanga and Musoma ports dedicated to handle cargo, traffic destined to Uganda and South Sudan. Beyond that the project will help to ease congestion at Tanzania’s principal’s port, Dar es Salaam.

Freight would be conveyed from Musoma by ferry to the Port Bell pier — about 350km of transportation in the lake. A rail connection already runs via Tororo to Gulu – nearly 600km – on the Pakwach branch.

A new line of roughly 250km would be constructed to Juba, and a further 550km to the Wao railhead in South Sudan.

Portland Cement launches vetting of suppliers


Business Daily

February 20th, 2012

Troubled East African Portland Cement Company is seeking to overhaul its list of suppliers amid a boardroom wrangle that the government has linked to fraudulent procurement.

In a newspaper advertisement, EAPCC is seeking to vet afresh 98 suppliers of goods and services, saying only companies scoring highly as per its evaluation criteria will be pre-qualified.

“All existing suppliers who wish to be retained in the database (of suppliers) must apply and submit up to date information requested in the current pre-qualification data sheet,” read part of the advertisement.

Analysts say the fresh vetting of the company’ suppliers could be driven by a need to clean up its procurement department in light of the accusation of fraud.

“The company could be moving to ensure their long-running relationship with suppliers is not tainted with fraud and that it gets value for money,” said Robert Nyamu, the head of forensic audit at Deloitte Eastern Africa.

Mr Nyamu said the review of pre-qualified suppliers helps companies to shake off old suppliers who may collude with senior management to push through fraudulent contracts.

Among the items and services EAPCC is seeking to pre-qualify suppliers for include raw materials such as coal, bauxite, and clinker whose recent supply contract sparked off the ongoing court battles.

Industrialisation minister Amason Kingi—who sought to suspend EAPCC’s board on December 22—has accused it of spending Sh1 billion on goods without following competitive bidding and, in another instance, overruled the tender committee to vary the terms of a clinker contract. “Those purchases were made by direct procurement or restricted tendering,” read part of an affidavit by Mr Kingi.

The affidavit, for instance, said the board changed the terms of a contract to supply 140,000 tonnes of clinker after the supplier — Sanghi Industrial -— requested to increase the price from $58.90 per tonne after supplying only 67,000 tonnes.

The irregular purchases were made between August 15 and November 30, 2011, according to the affidavit.

The company’s directors, who have been temporarily reinstated by the high court, have hit back at Mr Kingi, saying the minister wants them out over a multi-billion shilling tender that the government allegedly wanted to go to a local supplier. They said the award of the Sh1.8 billion kiln upgrade contract to a South Korean firm, had upset government officials.

Kenya: What audit unearthed at Portland


English: A pallet of Portland cement bags used...
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The Standard

January 28, 2012

By ALEX KIPROTICH

For the past two weeks, the country has been treated to unending circus at the multi-billion East Africa Portland Cement Company (EAPCC), which has stalled operations.

Management, which had been suspended by the Industrialisation Minister Amason Kingi, was reinstated by the High Court, but operations are yet to resume because employees have refused to work with the reinstated staff.

The matter has taken a tribal dimension as a few workers sympathetic to the reinstated management and board led by board chairman Mark ole Karbolo and Managing Director Kepha Tande have resumed work, while others have downed their tools.

The reinstated team is determined to remain at the helm of the company despite investigations by the Efficient Monitoring Unit (EMU), which is carrying out a forensic audit on alleged malpractices.

Corruption through flawed procurement and board interference with procurement has cost the company billions of shillings, leading to decline in operational profits for the last two years despite increase in volume of sales. Documents in our possession show the money was lost through variations of prices, tender manipulation, over-payment of allowances to directors and board members and flawed procurement…Read more.

Parsons Awarded Contract by USAID to Support Rural Roads in East Africa


The mid- to late-1990s seal of the United Stat...
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Webwire

August 30, 2011

PASADENA, CAParsons announced today that it has been awarded a contract by the United States Agency for International Development (USAID) to expand rural roads in the East African nation of Rwanda. The expansion of Rwanda’s rural road infrastructure will substantially benefit the Rwandan economy by supporting regional trade and giving farmers an improved transportation system and access to markets for their crops—90% of Rwanda’s population is involved in some way with crop cultivation, and improved roads will significantly impact a nation where many farmers live at the subsistence level.

Under this contract, Parsons will provide a roads inventory and condition assessments, prioritization, planning, preparation of technical designs, procurement support, and construction supervision for 1,000 kms of improved roads. The project will benefit Rwandans by employing and training local labor forces—women will comprise at least 30% of the labor force. Parsons will also provide mentor-protégé training on procurement to Rwanda’s District governments that will build local expertise and ultimately enable the Districts to tender maintenance programs directly to rural communities, empowering local work forcesRead more.

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