FLAWED PROCUREMENT

MPs poke holes in cereals board purchase of Sh841m gunny bags

Agriculture PS says ministry buys the sacks based on quantities they want to bag

In Summary

• Cereals board could not explain how it settled on firms contracted to supply the 3,225,000 bags. 

• Some bags were bought at Sh143 per piece and others at between Sh28 to Sh38.

Maize stocks at the NCPB deport in Eldoret.
MAIZE Maize stocks at the NCPB deport in Eldoret.
Image: MATHEWS NDANYI

MPs have queried the National Cereals and Produce Board’s procurement of gunny bags at Sh841 million saying the expenditure was unwarranted.

Members of the Public Accounts Committee further raised queries over the mode of procurement of the bags.

The leaders were reviewing a report where Auditor General Edward Ouko reprimanded the NCPB for failing to account for Sh440 million expended on the bags. 

In the 2016-17 report, the cereals board failed to explain how it settled on the firms contracted to supply the 3,225,000 bags.

The PAC session chaired by Jessica Mbalu (Kibwezi East) also raised concerns in the manner the firms – Rai Plywoods, Textplast Industries, and Trans Global Distributors – were procured.

They queried the variances in the prices of the bags, some of which were bought at Sh143 apiece and others between Sh28 to Sh38.

This was after Agriculture PS Hamadi Boga, who appeared before them, said three methods were used.

Some 2.7 million jute bags were procured through open tendering at Sh143 each. They were supplied by Greenland Suppliers.

Another 45,000 pieces of polypropylene bags were procured through the request for quotations at Sh38.28 per piece while 20,000 were bought at Sh28.07 each.

Textplast Industries supplied 460,000 bags through restricted tender and request for quotations. 

But MPs, during the review of the Agriculture ministry’s 2016-17 report, said the procurement was flawed.

Busia Woman MP Florence Mutua, Kimani Kuria (Molo), Patrick Makau (Mavoko), Daniel Rono (Keiyo South) and Michael Kingi (Magarini) were present.

The Molo MP said the different procurement methods used was in total violation of the law governing the engagement of suppliers.

“Why would we use a different tendering method for the supply of the same product?” Kimani asked.

Mutua said it was regrettable that the ministry gave business to outsiders yet there are local firms producing the gunny bags at a fair price.

“We cannot be giving outsiders a lot of money yet we have many local companies that are struggling to get such business,” the Busia MP said.

An NCPB official, who accompanied Boga, said the bags are sold by local agents, but most of them are sourced from India and Bangladesh.

Boga said the ministry opted for the suppliers as the local producers were churning low quantities due to lack of raw materials after the collapse of the sisal industry.

He said there is a push to support local manufacturing through an amendment of the Procurement Act.

On the varied prices, he said the NCPB procures on an as-needed basis and therefore, floats tenders at a particular point of need.

“Quotations sent today and those done two months later are likely to have the price variations,” the PS said, adding that bags are critical in dealing with aflatoxin.

“We buy bags based on the quantities we want to bag. It is from this that we define how many we need.”

The PS added that the ministry has embarked on reforms to help the NCPB manage grains better and prevent losses.

“We have a lot of challenges in managing grains. This is an area we have prioritised for reforms this year to reduce cost and improve the efficiency of the system,” he said.

Mbalu directed the ministry to provide tender minutes and the board approvals for the purchase of the bags.

The Agriculture ministry was also probed over the expenditure of Sh45 million for unsupplied subsidised fertiliser.

However, Boga explained that the money was part of Sh456 million paid to supplier Holbud Ltd, "but is still retained at the ministry’s account held at KCB".

The company was to supply 182,000 bags of fertiliser but failed to deliver 17,060 bags despite being paid the full amount for the contract.

Edited by R.Wamochie