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How Tourism Fund Looted Ksh 3 Billion through Coast Utalii College Expansion

Outgoing Tourism Fund CEO Joseph Cherutoi (right). [PHOTO/ COURTESY]

In one of the signature ways money has been stolen from state coffers in the Jubilee government, it’s now clear that at least two billion shillings of taxpayers’ money could have been stolen from a Utalii College project in Coast region.

According to sources within parliament’s Public Investment Committee, the proposed Ronald Ngala Utalii College located in Kilifi has been at the centre of investigations over claims that cost of construction has been exaggerated and the difference paid to key individuals in the Ministry of Tourism.

The Ronald Ngala Utalii College was an idea mooted in 2007 by the Cabinet chaired by then-President, Mwai Kibaki. The cost of construction for the premier tourism training institution was Ksh 1.9 billion but the Tourism Fund Board, under the leadership of then Chief Executive Officer Allan Chenane, unprocedurally increased the cost of construction to Ksh 8.9 billion and renamed it without following due process.

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Realising that the issue was going to get the attention of parliament, police and the EACC, the Tourism Fund Board again decided to revise the projected cost of construction to 5 billion shillings. Chenane who featured in the various list of shame including that of EACC, left the office in March 2018.

In 2016 April, it was realised that more than 3 billion shillings (61 per cent of the cost) had been paid while less than 40 per cent of the work had been done. At one point, Tourism Fund Board Chair Henry Kosgei admitted that things were not adding up while then CEO Allan Chenane had a rough time explaining why the board chose to implement a project that had no approval from relevant bodies as per the law.

The project comprises a 5-star hotel with 600 beds built on 60 acres of land. It is part of the larger Utalii University Complex, with staff housing of 120 Units – Maisonettes and Apartments.

The mess at Tourism Fund cannot just be blamed on current Cabinet Secretary Najib Balala but also his predecessor Phylis Kandie and the then Treasury CS Henry Rotich. The three actively participated in the process and facilitated the pilferage of funds with CS Balala using his proximity to President Uhuru to bulldoze things around.

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Efforts to have the EACC and Directorate of Criminal Investigations (DCI) move in and arrest the scammers has proved futile as the investigators have constantly been “facilitated” with “favours” from key fund officials.

While Treasury was to fund the project for up to Ksh 1.2 billion, the extra 700 million was to be from the fund’s own sources. DCI and EACC should be able to find out how the cost moved to 9 billion shillings before being revised to 5 billion shillings in a short while. What necessitated the variation? implementation of the development at different times.

According to documents tabled by the fund’s board, Treasury was set to finance the project at a cost of 1.23 billion shillings for four years until 2018.

While at Ksh 8.9 billion shillings, the architects, Baseline Architects, were paid the consultancy fees based on the 9 billion shillings project valuation even when there were clear indications that the fee was exaggerated.

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In her defence, CS Kandie has said that the negotiations between the contractor, Mulji Devraj and Brothers Limited, the Treasury and her former ministry to scale down the project started in November 2013 following austerity measures instituted by the government.

However, the Cabinet did not discuss or approve any memo sanctioning the construction of the controversial Ronald Ngala Utalii College in Kilifi at a cost of Sh10.4 billion, Tourism CS Najib Balala told Parliament last week.

CS Najib Balala told the National Assembly’s Public Investments Committee (PIC) that the Sh8.9 billion project has so far consumed Sh4.1 billion on the 35 per cent work done.

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“The so-called Cabinet memo, signed between Treasury secretary Henry Rotich and then Tourism minister Phylis Kandie in 2014 has not been approved,” Mr Balala said, adding that the Cabinet office had confirmed that the memo that the Tourism Trust Fund relied on to award the multi-billion shilling project had not at any time been slotted for deliberation.

Mr Balala revealed that the Tourism Trust Fund management rushed through the tendering process and executed it despite the existence of a Cabinet moratorium stopping the award of tenders worth more than Sh500,000.

At least Ksh 3 billion might have been lost from this fraud.

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Written by Kahawa Tungu


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