Freedom for Joe Sang, Kenya Pipeline managers as court drops Kisumu Oil Jetty case

Former Kenya Pipeline Company md Joe Sang. 

Former Kenya Pipeline Company Managing Director Joe Sang. 

Photo credit: Francis Nderitu | Nation Media Group

The Sh1.9 billion Kisumu Oil Jetty project was well planned and no public funds were lost, the Anti-Corruption Court in Nairobi has ruled while dismissing graft-related charges filed by the State against former Kenya Pipeline Managing Director Joe Sang and five top ex-managers.

The former managers include Company Secretary Gloria Khafafa, Head of Procurement Vincent Cheruiyot, Nicholas Gitobu (General Manager Finance), Samuel Odonyo (Procurement Manager) and Billy Letuya Aseka (General Manager Infrastructure).

Magistrate Victor Wakumile said Wednesday that there was no evidence to support criminal charges including abuse of office, engaging in a project without prior planning and willful failure to comply with guidelines relating to management of public funds.

The court found that the procurement was not flawed as alleged by the prosecution and that the project was undertaken within the planned financial budget.

The court case sprung from the construction of the pipeline at a cost of Sh2 billion and the award of the contract to Southern Engineering Company Ltd. Investigators had alleged that there was corruption and loss of funds during construction of the pipeline. 

Kenya Pipeline Corporation kpc

The Sh.1.9 billion Kenya Pipeline Corporation oil jetty in Kisumu on May 13, 2019.

Photo credit: Ondari Ogega | Nation Media Group
Kenya Pipeline Corporation kpc

The Sh.1.9 billion Kenya Pipeline Corporation oil jetty in Kisumu on May 13, 2019.

Photo credit: Ondari Ogega | Nation Media Group

The project was aimed at improving the reliability of fuel supply to Uganda, Rwanda and Eastern Democratic Republic of Congo and facilitating safe transportation of oil for the various marketers over Lake Victoria to neighbouring countries. Another goal was to eliminate hundreds of fuel trucks from the roads. 

Witnesses, prior planning

Mr Wakumile said Mr Sang and former managers arraigned in court delivered the project. He also noted that witnesses produced in court by the prosecution were consistent that there were no malpractices or irregularities.

The magistrate said the project was planned for in 2006 and the same was contained in KPC's strategic plan for 2009/2010 and 2011. The project was also contained in the company's Vision 2025, said the magistrate while dismissing the prosecution’s argument that Mr Sang and the former managers engaged in the project without prior planning.

"I find that all prosecution witnesses were unanimous that the construction of Kisumu Oil Jetty was indeed planned before construction and way back in 2006 before most of the accused persons were employed by Kenya Pipeline Company," said the magistrate.

He found that the charge of engaging in unplanned project was defective both in law and facts.

“The entire case against all accused collapses under section 215 of the Criminal Procedure Code (CPC) and they are now acquitted,” said Mr Wakumile. 

The court noted that the witnesses said that Kisumu oil jetty was a multi-year project and received funding from the National Treasury in two financial years: 2016 and 2017. He said that the fund allocation was in two tranches of Sh1.4 billion and Sh500 million.

Among the prosecution witnesses was Mr John Ngumi, former board chair of KPC, who confirmed to the court that he signed for implementation of the project.

Bosses appointed after implementation

The court noted that the project had been in KPC's plans since 2006 and that most witnesses, including Mr Ngumi, had confirmed that the project was implemented way before most of the accused joined the company.

Safaricom's new Board Chairman John Ngumi.

Mr John Ngumi. 

Photo credit: Francis Nderitu | Nation Media Group

Mr Sang was appointed MD in 2016 when plans for undertaking the project were already in place. Similarly, the other accused persons were appointed to their respective positions at the state corporation when the project was in the implementation stage.

Hence, the court held that they should not have been charged over actions committed prior to their appointment. 

Mr Ngumi also testified that the project was initiated through a supplementary budget in the financial year 2016/17. He further told court that the project and budget were approved by the National Treasury and the Ministry of Energy.

The magistrate also noted that no payment was made to the contractor beyond the approved budget of Sh1.9 billion and that each payment was made within the budget.

All procurement steps followed 

The court also threw out claims that Mr Sang illegally authorised payments for the project.

While acquitting Mr Sang of charges of abuse of office, the court said that all procurement steps were followed during the implementation of the project. 

In addition, the project was approved on seven different levels including by the chief engineer, senior engineer, project manager, procurement manager, infrastructure manager, general manager finance and the MD. 

The court found that Mr Sang, as the MD, followed all procurement steps when awarding the tender and sought for expert and professional opinion before awarding the tender to Southern Engineering Company Limited. 

Mr Wakumile also found that the court could not punish the accused persons for alleged violation of the Public Procurement and Asset Disposal Act.

He said according to the Act, the non-compliance with the procurement regulations calls for internal disciplinary actions.

The prosecution had argued that it was illegal to commence the project through a supplementary budget.

The former KPC officials were accused to have committed the offences between June 2016 and June 2017. They were charged in 2019.