State firms reveal names of secret tender winners

Abdulswamad Nassir

Public Investments Committee chair Abdulswamad Nassir when Public Procurement Regulatory Authority acting director general Pauline Opiyo appeared before the committee over the special audit report on utilization of Covid funds on December 8, 2020. 

Photo credit: Diana Ngila | Nation Media Group

What you need to know:

  • Move raises the hope of transparency and fairness in the multi-billion shilling sector.
  • Kenya is reviewing tender processes to unmask shareholders of firms who secretly benefit from State deals.

State firms have begun disclosing full identities of owners of companies that clinched contracts with them, raising hope of improved transparency and fairness.

A spot check by the Nation revealed that several government entities such as Kenya Power are now publishing names of contract beneficiaries — a departure from the past when such information was a private affair.

The Public Procurement Regulatory Authority (PPRA) recently published a new tender template requiring firms that win State tenders to disclose beneficial company ownership.

The form says failure to disclose the information would amount to refusal of the contract by a successful entity punishable by debarment from future State tendering process under Section 41(1) (e) of the Public Procurement and Asset Disposal Act, 2015.

“I fully understand that failure to furnish the procuring entity with the beneficial ownership information within the period provided for in the letter of award shall invalidate my award and may be considered as refusal to enter into a written contract which is punishable under Section 41(1) (e) of the Public Procurement and Asset Disposal Act, 2015,” the PPRA reads.

Kenya is reviewing tender processes to unmask shareholders of firms who secretly benefit from State deals through nominee accounts to boost public sector procurement transparency.

War on corruption

The International Monetary Fund (IMF) has also previously demanded disclosure of secret owners in outfits awarded contracts in the war on corruption. 

The new template by the PPRA comes after Attorney-General Kihara Kariuki released fresh regulations that will compel the authority to reveal information on beneficial owners of firms that have secured tenders in State-backed entities.

The previous regulations required that data on beneficial owners — investors who own more than 10 per cent stake in companies through secret accounts — be made available to the Kenya Revenue Authority (KRA), security agencies, and the Financial Reporting Centre, which tracks illicit wealth.

In October 2020, Kenya started collecting personal data on beneficial owners, including their names, KRA PIN, national ID or passport copies, postal address, residential address, occupation, and telephone numbers.

This information will now be made public through a portal manned by PPRA — the State procurement regulator — for firms that have secured tenders in government and parastatals.

The government has been posting transactional level procurement data at the public procurement information portal but the World Bank wants a more granular level of detail.