Officials’ plot to sell Numerical firm exposed

By MWANIKI MUNUHE

The financial troubles of a key parastatal slated for privatisation have been linked to a plot to have it sold to a private company at a throwaway price.

Sources say powerful individuals, who previously worked at the Numerical Machining Complex, are behind the plot and have orchestrated various acts of sabotage over a 10-year period. Their goal is to engineer the sale of NMC, one of Kenya’s most ambitious parastatals, to a specific buyer by allegedly running it down to the point where nobody else wants it.

The top NMC officers believed they could recommend its disposal through a private sale to the Privatisation Commission after demonstrating it was a dead horse economically and it would be unreasonable to allow it to continue operating with support from the government.

The chronology of events aimed at effecting the plan started with burning of three crucial transformers on diverse dates in 2003. No report was filed with the police for action on the suspected arsons, sources say. Neither was there any form of internal official investigations as to the cause of the fires.

One of NMC’s production engineers told The Standard on Saturday: “Two of the transformers would cost (about) Sh12-13 million while the third one was bigger and would cost something in the region of Sh50 million.”

The arsons, our source says, were intended to cripple the company and prompt a speedy disposal to a foreign company that had just set base in Kenya.

“Anybody who has been working for NMC from around that time will tell you the story. We know the details but what can you do?” he posed. “In 2003, there was a company set up to produce the same products NMC was producing for railway companies. The burning of the three transformers that supply power to the production facility was deliberate.”

However, the plot hit a dead end when the government decided to turn around key parastatals. It continues to be the source of unending squabbles between powerful individuals who want the company sold off and the management.

Privatisation Commission chairman Solomon Kitungu said his office does not intend to privatise NMC but instead, wants to make it productive.

“The emphasis is on strategic review,” he says. “In fact, we are working jointly with NMC and the terms of reference have been agreed upon even with the principal secretaries in Industrialisation and Treasury. We want to first understand it and then propose how it can be made more productive.”

The Standard On Saturday has obtained documents showing the company was in such dire straits it could barely process orders from clients. In 2010, for instance, the Ministry of Industrialisation awarded NMC an order for 840 lathe machines at a price of Sh550,000 each. By close of business in September last year, two years later, the company had only produced 30 lathe machines.

Production engineers working for NMC say that the company has a capacity of producing at least 10 such machines a month. The 30 machines produced in two years could have been produced in just three months. In fact, when contacted for a comment, NMC acting managing director Christine Mbando admitted that the company has already produced 60 such machines in six months beginning last September.

Mbando, who took over after the controversial exit of the former managing director George Onyango, says NMC loses at least Sh1 million per hour every time their is power failure.

“We have made it a priority to purchase power back up,” she says. “Very expensive protective fuses burn in 10 out of 18 machines that we have every time there is power failure. The company has lost a lot in the past because the materials we use in production, especially molten metal, require consistent power. In case of power failure at critical heating temperatures, expensive materials go to waste … because you cannot use them again. Yet, materials contribute about 42 per cent of the total cost of production.”