Perera yet to sue Kenya for new demands on Anglo Leasing

Kenya: Mystery of the fresh demand for Sh3.05 billion by a businessman in the Anglo Leasing scandal contracts deepened after top government officials said they were unaware of equipment supplied from the tender.

Government officials were at a loss to say whether Sri Lankan businessman Anura Perera supplied any goods to National Intelligence Service (NIS) for which he is demanding to be paid the colossal sum.

“I do not know exactly what was to be supplied to NIS,” said Treasury Cabinet Secretary Henry Rotich. “The agency, in my opinion, is best placed to tell you whether it got these goods.”

Amidst intense criticism from civil society and the public, government this week paid Sh1.4 billion to two companies associated to Mr Perera for two Anglo Leasing-type contracts that were cancelled in 2005.

Disputed contracts

While appearing before Parliament’s Public Accounts Committee, Treasury Principal Secretary Kamau Thugge and Senior Deputy Solicitor General Muthoni Kimani revealed the new demand by Mr Perera.

The demand is in respect to the Flagstaff NCTC Project, a contract for the design, supply and installation of various electronic security equipment for the National Intelligence Service.

Efforts to ascertain from NIS the exact nature of the security equipment it requested for and whether Perera actually supplied them bore no fruit, as the agency remained tight lipped on the issue.

Rotich however maintained that like the 18 other Anglo Leasing contracts linked to Perera and other businessmen, the government considers them to be in dispute and hence it would not pay up. “The Sh1.4 billion we paid was after the court ruled on the same. On the new demand, our position is that this project was disputed and unless a ruling is made against us, our position remains that we will not pay,” he said.

Attorney General Githu Muigai said Perera is yet to take Kenya to court over the new demand. “I will duly respond when and if he ever files a case in court seeking payment, but until then there is little else we can do,” he said.

The exact date when the contract was signed is also unclear. When contacted yesterday, Rotich said he would have to go to the office to ascertain the exact date when the contract was entered into.

Most of the 18 Anglo Leasing type contracts, which the government claims were corruptly awarded, were signed between 1997 and 2004, and most of them were security-related contracts.

The PAC asked the Treasury to furnish it with details about the Flagstaff Project, but the Committee’s chairman, Budalang’i MP Ababu Namwamba, had not responded to our inquiries whether PAC received the details.

Ms Kimani told the committee that unlike the seven other Anglo Leasing-type contracts that became the subject of investigations in 2005, Pricewaterhouse Coopers did not evaluate the Flagstaff project due to the security nature of the project.

PwC was hired by the government to gauge the value and procurement of the Anglo Leasing contracts and based upon its report, the government challenged the claims for contracts that had not started.

Floodgate of claims

“The project was alive when PwC was evaluating but the caveat was that due to national security considerations it was not among the 18 that were to be evaluated,” she said.

However, a senior officer at the State Law Office said that the first demand for the same amount was made to the government in 2006 two years after the contract was purportedly signed.

Ms Kimani said the government is first looking for someone to evaluate the contract and report on how much work has been done.

Transparency International Executive Director Samuel Mbithi said that paying the Sh1.4 billion would only open the floodgates of claims for the other Anglo-Leasing contracts that were cancelled. “This is what will open the floodgates on the excuse of maintaining Kenya’s credit worthiness. They have paid the Sh1.4 billion, they might pay the 3.05 billion and they might even pay more. The only way to close these floodgates is to interrogate on whose authority the Sh1.4 billion was paid.”

However Mr Rotich said Flagstaff Project was the only remaining unresolved of the Anglo Leasing contracts.

“One way or the other, it too, will come to an end some day,” he said.