Concerns once struck the Tourism Fund amid irregular disbursements in the purchase of Kenya Utalii College Coast branch and Sh3 billion paid for consultancy at Ronald Ngala Utalii College in Kilifi County which former CS Najib Balala played a crucial part.
Former Tourism CS Najib Balala, former PS Safina Kwekwe, and Kenya Tourism Fund CEO David Mwangi gave statements on irregular payments linked to Ronald Ngala Utalii College.
Catering Development Levy Trust, which advertised the tender for Ronald Ngala Utalii College Coast branch, was also under scrutiny on November 23, 2012, along with the firm that won the bid.
The tender went to Mulji Devraj and Bros under tender committee No TH/6/2013-13 on April 11, 2013, with a contract value of Sh8.9 billion. Nilesh Halai, a director of Mulji Brothers, was heavily involved in the scandal.
The family behind the construction firm includes patriarch Harji Keshra Halai (Haribhai) and his wife Rambai Harji Halai, based in Mombasa.
Family members include Mahedra Halai, Hitendra Halai, and Joyata Halai, with grandchildren Shushil, Krishna, Jilna, Mithul, Krupaal, Harshil, Malini, Mehul, Jinali Annol, and Anya involved in the business.
The audit reported that the contract award was corrupt, with Mulji Devraj and Bros being the third-lowest bidder at Sh8,961,370,998, a difference of Sh627,615,756 above the lowest bid of Sh8,333,755,242.
There was no valid reason to risk public funds, losing Sh627 million by selecting the third-lowest bid.
The consultancy contract, worth Sh556.8 million, went to Baseline Architect Ltd.
The report highlighted fraudulent management, over-design, and violation of financial laws, indicating ineligible payments to consultants and contractors.
The Tourism Fund investigation under EACC inquiry file number EACC/MLD/FI/INQ/4/2021 revealed that Kenya Tourism Fund paid Sh8.5 billion more to acquire the college, with Balala and Kwekwe allegedly soliciting kickbacks from firms to expedite payments in the final months of former President Uhuru Kenyatta’s administration.
The report indicated the college acquisition cost was inflated to Sh10.4 billion, while the original estimate was Sh1.95 billion.
Suspicious accounts were used to divert funds, including a defunct Catering and Tourism Development Levy Trustee bank account, which received Sh435 million on January 16 and Sh64 million in February between 2020 and 2021.
This Treasury payment was meant for contractors.
The transfer of the project from Utalii College to the Tourism Fund, done by Balala through a gazette notice on April 9, 2010, revealed records showing only Sh1.2 billion was received by the Tourism Fund.
Documents from the EACC showed a consultant billed Sh556.8 million but was shockingly paid Sh817.9 million, with Sh261.1 million unaccounted for and shared among top managers and ministry officials involved in the scam.
During the 2014/2015 financial year, the National Treasury paid Sh811.4 million to the Ministry of Tourism for the Ronald Ngala project.
The Ministry then released Sh311.4 million to the fund as part of payments owed to contractors, despite no valid contract between the ministry and contractors.
The Attorney General advised the Ministry of Tourism that establishing a training institution as a body corporate under section 29(1) of the Hotels and Restaurant Act (Cap 494) was inconsistent with the Act.
In certain cases, the Ministry of Tourism refused to transfer all the funds for the project from Treasury to the Fund, delaying payments to contractors.
Baseline’s senior partner, Morris Njue, was involved.
The firm was previously barred by a court from demanding Sh1.4 billion from the National Hospital Insurance Fund.
Insiders revealed that a Sh5 million bank transfer on January 7, 2020, from a KCB Revenue Account to an Equity Operations account was not reflected in the Equity account.
The management ignored a Treasury Circular Ref: No. AG.416/3 Vol (19) dated June 24, 2020.
Additionally, Fund managers delayed paying contractors on the Ronald Ngala project, leading to penalties and interest of Sh1,520,489,236, with Sh516,166,749 still unpaid as of June 30, 2020.
Outside the Ronald Ngala contract, a local company was awarded a Sh144,503,960.27 contract on February 12, 2018, for implementing an integrated Revenue Management System.
The contract, initially ending in October 2018, was extended by five months in 2019 and increased by Sh28,900,972.
In April 2021, the Fund began paying for maintenance services though the project was only 70% complete.
Another contract for Sh34,631,976 was signed on February 12, 2020, for a contact center.
The contractor received Sh6,627,843 despite incomplete work.
The Fund also hired a law firm to process a title deed for Kenya Utalii College, per letter Ref TF/CONF/10/158 on December 17, 2019.
Though the firm obtained a deed plan for the land, the title deed had not been secured by April 2021, despite full payment of Sh11,492,655 on February 19, 2020.
Top Fund managers involved in the embezzlement include Cherutoi, acting Director of Corporate Services, Erick Kiplagat, Director of Levy Services; Charles Okeyo, Director of Strategy and Resource Mobilization; Eden Odhiambo, Supply Chain Manager; Emily Wagema, Corporate Communications and Marketing; Patricia Ondeng, Legal Services; James Njogu, Risk and Internal Audit Manager; Abraham Kiptum, Head of Human Capital; Adan Adad; and Information and Technology Manager Isaiah Rutto.
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