By Ryan Okoth
The recent interdictions of six officers over the multimillion apron bus scam at Kenya Airports Authority (KAA) is only a tip of the iceberg, if the depth of the scandal is anything to go by.
An audit report requested by the Board weeks before President Uhuru Kenyatta whistle blew over the rot blames several management staff at Kenya’s biggest aviation facility.
Right from the Board, which has found scapegoat in the six suspended officers, to the administration officials and the finance department, the rot runs deep and more heads are yet to roll. What was meant to provide transport services has turned out to be a procurement ghost that will take long to exorcise.
We can reveal that it took five years of intense evaluation and negotiations to award the lucrative Sh1.1 billion deal to Relief & Mission Logistics Ltd for the eight-year bus services contract. The negations, which saw a tender committee dramatically change positions between declining the deal and later giving full support without any changes to it is indeed, suspect.
Many questions have been asked as to just what kind of buses would be run at a cost of over Sh2 million per month per each? Was there a need for the five buses? Were the costs justified? Did KAA have another option apart from agreeing to pay the huge amounts? At whose doorstep does the buck stop for the blatant disregard of ethics in managing public resources?
Well, the five buses are indeed special. They carry between 112 and 115 passengers from the Aircrafts to the lounges. They are relatively low and carry several other specifications as may be asked by the clients (in this case KAA). They are said to cost somewhere between Sh38 and Sh42 million inclusive of VAT.
JKIA has changed design over time and the construction of remote stands following the 2013 inferno heightened the need of Apron buses. An increase in passenger numbers who needed safe passage transfer services also justified the need for the special buses. Like in other countries, KAA had the mandate to provide the services, which it had authorized Kenya Airways to start providing in 2008. The airline currently has 12 of such buses.
Where KAA went wrong is the actual implementation of a mandate it is charged with just like other Airport Authorities worldwide do. A series of negligence and failure to implement crucial recommendations collapsed the noble idea that was even meant to earn the Authority revenue and left it with a pending Sh14.08 million bill unpaid as the shakes began two weeks ago at the management.
A committee formed in 2007 chaired by Mr. Harrison Machio who is currently the Safety Manager, Bernard Mogambi, Mohammed Karama, Simon Githaiga, Justus Kabaka and Christopher Warutere (Secretary) had recommended that KAA should simply purchase the apron buses and concession a third party to operate and maintain them.
It took more than four years before a tender (number KAA/JKIA/752) was floated where KAA sought to concession a third party to buy, own, operate and maintain the apron buses; an option the committee had plainly discouraged. The tender notification letter was issued on May 14 2012 and the contract signed almost two years later for a USD 120,000 per month. At what point did the plan change and why? Who pushed for the latter plan?
The winning bidder was also required to build supporting facilities including an office block, maintenance yard and a fueling facility at site, which KAA already offered even though the firm is yet to start constructing the facilities said to cost up to Sh80 million.
Under this arrangement, KAA was meant to recover the cost of operating the buses from the 48 airlines operating at JKIA and in case of any gaps, an annual budget of Sh75 million had already been set aside to cover up.
“The cost charged by the bidder ought to be recoverable from the airlines since the apron buses service should not be a free service. However, since the introduction to the service on November 28 2014, the airlines have been getting the service for free. The user/marketing should provide explanation why it took that long to implement the project,” notes an internal audit report prepared in May
The report also blames the administration manager for failing to implement this strategy that would ensure no loss is incurred in the provision of the services.
KAA which charges airlines between $75 for an aircraft with passenger capacity of 0-180 and $100 for ones with capacity of 180 and above for use of its air bridges had been advised to charge between $60 and $80 per trip for the apron bus services.
With the five buses making a minimum of seventy trips per day and assuming the minimum of $60 per trip was settled at, KAA would rake in a $126,000 per month leaving the project self-sustaining.
An insider source informs us that another taskforce with recommendations on how to recover the cost had presented its proposals to the Board, which it shelved a few weeks before the President visited and spilled the beans.
Why was there reluctance to begin charging the airlines for the services? Was someone eyeing the Sh75 million allocated as back up to cover any shortfalls on the monthly costs?
“In my opinion the process of procuring the apron buses was not well coordinated and as a result the Authority will continue incurring financial losses up to and including the time when cost recovery agreement will be signed with the airlines,” wrote KAA internal auditor.
The insider who requested not to be mentioned also said the team on whose head the recent interdiction axe fell were not the real culprits as they acted based on the business case presented and after the first negotiation team had Okayed the tender.
The evaluation team comprising Mr Mogambi – M&BD (Chairperson), W. Ndegwa – Airport Accountant, C. Warutere – JKIA Engineer and D. Ngetich – Procurement had recommended on February 27 2012, that the tender committee should award the contract to Relief & Mission Logistics Ltd at a monthly cost of US $120,000 (Sh10.8 million).
According to their evaluation report, the other bidder Pewin Cabs Ltd was disqualified at the preliminary evaluation stage for failing to submit the tender security and CV copies for its key personnel as a requirement. The bidder had quoted a monthly payment of US $ 86,876.24 (Sh8.3 million) duty paid.
After the August 2013 inferno at JKIA, the World Bank granted the Authority Sh201 million to procure seven apron buses. Subsequently the Authority tendered for the supply of the apron buses and invited for bids from six firms. Only two firms bid out of the six that had been invited. Of the two, one of the bids had been submitted late and the other one was not responsive, thereby making the tender non-responsive.
According to a memo dated March 16 2015, the tender committee (TC) has approved the retender of the supply of the apron buses where the two bidders who responded are to be invited. The Authority is said to have requested for a no objection from the World Bank to retender, the process has taken long, a matter the auditor noted in their report.
“The Authority should expedite the retender of the apron buses given that this process has now taken almost two years,”
The seven buses are however meant to supplement the five, which have leased as the KQ fleet of twelve are meant to park but the modalities are unclear yet.
While opening the new terminal two at Jomo Kenyatta International Airport, the President tasked KAA chairman David Kimaiyo to identify the officials involved and ensure they are prosecuted.
“We must use resources allocated to us properly. I find it impossible to believe and to understand that you can say you have buses here you are paying Sh10 or Sh11 million per month and they are only five buses. Ensure those who are responsible are arrested and the public funds returned with immediate effect,” Mr Kenyatta ordered.
Six senior managers of the Kenya Airport Authority (KAA) have since been interdicted after a lengthy board meeting decided on them to step aside for 90 days of investigation.
The Board resolved to interdict suspended Managing Director Lucy Mbugua, Finance General Manager John Thumbi, Legal Counsel Victor Arika, Procurement Manager Lilian Okidi, Airport Engineer Christopher Warutere and Head of Examination Martin Kungu.
The management of the aviation facility is said to have been divided into camps with one supporting the suspended Managing Director Ms Lucy Mbugua and the other standing behind Moi International Airport Mombasa Manager Mr Yatich Kangugo who has been acting managing director since February 19th.
Ms Mbugua’s and Mr Yatich’s camps are said to be unable to meet eye to eye with the later said to be keen on attempts to keep Ms Mbugua outside the facility permanently.
Sources privy to the divide intimate that the Yatich camp was responsible for the President’s outburst over the bus contract after they failed to brief the head of state on the actual plans.
President Uhuru Kenyatta had even suggested that the Authority should have approached him for a cheaper option of the National Youth Service (NYS) buses; underlining how little information he had on the nature of buses being contracted.
“Why don’t you come for the NYS buses at even Sh100,000 per month? This cannot be sustained at all,” an angry Kenyatta said at the Airport after opening the Sh1.7 billion terminal 2.
KAA is not new to scandals. A duty free shops award after the 2013 fire incident saw Ms Mbugua and general manager John Thumbi together with two other officials; Katherine Kisila (corporation secretary) and Obadiah Orora (procurement manager) sent on compulsory leave on February 19 after they were accused of irregular award of the shops at the Jomo Kenyatta International Airport to Dufry International.
The embattled KAA managing director has now been slapped with three interdictions in three months meaning she has been interdicted every month since February save for April.
JKIA currently handles 6.5 million passengers per year with 48 airlines engaged in passenger and cargo transit. A huge expansion plan is already underway expected to push its annual passenger capacity to 25 million in the next decade. The modernization plan has been designated as a flagship project in Vision 2030 for the industry that brings in Sh3 billion in taxes every year. These are the visions put at risk following the wrangles at Kenya’s largest aviation facility.
KAA Board Chairman and former Inspector General of police David Kimaiyo is also relatively new with less than six months since he joined the Board in January and may only be finding himself caught up in KAA management wrangles that began years before he went to the airport.
He is also dealing with the perception that he failed in the security docket and may have been dumped at KAA by the appointing authorities after his ‘voluntary early retirement.’
It is unclear whether the Board that had earlier suspended Ms Lucy Mbugua in February and recalled her before a statement from state house suspending eight other officials of various government agencies led to her second dismissal will do anything different this time.
Going by the internal auditor’s points, it would be interesting to know whether the Public Procurement Oversight authority (PPOA) will be involved in the tender probe.
The Board which swung to action only after President Uhuru Kenyatta went to JKIA and broke the scandal in public also raises questions as to how closely are they monitoring the affairs of KAA having not raised a finger throughout the tender and free operations of the buses meant to even earn revenue to the Authority.
The Terminal 2 opening ceremony was Kimaiyo’s first meeting with the President since his appointment and he went ahead to deliver his gratitude in his speech. What followed as his first assignment from his boss was not pleasurable though.
The President then gave Mr Kimaiyo his first direct assignment at the board since his appointment; to ensure all those involved are arrested and prosecuted.
A KAA staff confirmed the working environment is generally tense with fears of victimization rife against those perceived to be close to the suspended MD, those supposedly ‘sabotaging’ the interim office holders.
Following the latest suspensions, a memo addressed to members of staff asked them to cooperate with the officials appointed to replace those suspended.
“You are requested to extend your usual support and co-operation to the officers who have been appointed in the acting capacity to take up the official responsibilities of the staff on interdiction,’’ read the internal Memo signed by Acting Managing Director Yatich Kangugo.
Among the Six suspended, Airport Engineer Christopher Warutere is the only member of the Tender Evaluation Committee that awarded the lucrative deal, who has been affected. All the other individuals most of whom had changed departments or even moved to other government parastatals continue working unperturbed.
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Thanks a lot for sharing!