MPs overrule Kebs in Sh4bn fertiliser import deal probe

Some of the member of Committee on General Oversight (CGO) seated at parliament chambers on October 14, 2014 as they wait for Cabinet Secretaries to appear before them to respond to some questions. PHOTO | FILE 

By EDWIN MUTAI, emutai@ke.nationmedia.com

Members of Parliament have cleared a controversial Sh4 billion subsidised fertiliser supply contract, overruling the Kenya Bureau of Standards’ (Kebs) assessment that found impurities in some products imported through the port of Mombasa early this year.

The National Assembly’s Agriculture Committee endorsed the three-year contract for the supply of assorted types of fertiliser citing submissions by Agriculture ministry and procurement officials.

“In view of the submissions by the director-general of Public Procurement Oversight Authority, the Ministry of Agriculture, Livestock and Fisheries should continue to execute the current three-year contractual framework for the supply of assorted fertilisers until its expiry in 2016,” the committee says in its report even as it maintains that the ministry should in future restrict the contract term period for bulk procurement of fertiliser to one year to ensure competitive sourcing of suppliers.

The MPs cleared the fertiliser deal even after noting glaring discrepancies in the contract for the supply of 21,000 metric tonnes of the product in May 2015.

The standards body Kebs had declared substandard a consignment shipped in under the deal. The MPs’ position leaves the country in a legal quagmire in which a government agency with the technical and human resource capacity to offer professional advice is overruled by Parliament.

The MPs cited various faults in the three-year contract, including the absence of an end date, the exclusion of insurance and clearing cost from the pricing regime and the negotiation of fertiliser prices at the time of delivery even as they cleared the deal.

The contract allowed for a 10 per cent variation of the original contract price in case of any increase in product prices.

The national government agreed to the three-year procurement deal to secure and promptly supply farmers with subsidised fertiliser within the government budget cycle.

The government, through the National Cereals and Produce Board (NCPB,) entered into a contract with M/S Holbud Limited on April 10, 2015 for the supply of 21,000 MT of assorted fertiliser.

Kebs impounded part of the fertiliser consignment that had been imported into the country by M/S Holbud Limited and the NCPB after tests showed it was caking or lumping.

Holbud, a UK registered firm, was to supply 21,000 MT of fertiliser through its local agent, Stuntwave Limited.

A consignment of 17,062 MT of assorted fertiliser arrived on May 11, of which 7,260 MT was imported by the NCPB and 9,782 MT shipped in by M/S Stuntwave.

Kebs authorised the discharge of the consignment after verifying the documents presented, including Certificate of Conformity (CoCs), among other documentation.

The NCPB then reported that the fertiliser at the bottom of the vessel’s hatch had shown signs of caking or lumping after the discharge of approximately 14,000 MT, causing Kebs to stop the discharge.

“NCPB had offloaded approximately 4000 MT while M/S Stuntwave Ltd had offloaded all its consignment of 9,782 MT before the stoppage,” the MPs said in the report