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Swiss, Spanish firms clinch Sh16b sea desalination deal

By BAYA SAMUEL
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Governor Ali Hassan Joho has unveiled two international firms that will carry out the Sh16 billion sea desalination project in Mombasa.

The project will start in June next year.

Spanish company Almar Water Solutions and Switzerland’s Aqua Swiss will develop Kenya’s first large-scale desalination plant.

Mr Joho said the project will end the perennial water shortages in the county.

Aqua Swiss has been awarded the contract to build a smaller desalination plant in Likoni with a capacity of 30,000 cubic metres per day.

10,000 CUBIC METRES

“Almar Water Solutions will put up the desalination plant in North mainland zone. The project is worth Sh16 billion and will be able to pump more than 100,000 cubic metres of water per day, giving quality water supply to over a million people in the county,” Mr Joho said.

The governor said the project would stop over-reliance on water from other counties. 

Mombasa sources water from Kwale, Kilifi and Taita-Taveta counties.

“The rising population has led to an increase in demand, yet the supply from the neighbouring counties keeps fluctuating. Currently the demand stands at 200,000 cubic metres against a supply of 42,000 cubic metres” Mr Joho said.

DESALINATION PLANT

The county boss revealed he has been working on finding sustainable solutions for water scarcity, including the prospect of signing a Sh20 billion water purchase agreement for the Mwache dam and construction of desalination plants.

“It has been a long journey for the desalination project and finally it is now taking shape,” Mr Joho said during a press briefing at his office on Tuesday.

The county government invited proposals in a 2016 advertisement. Vetting was done and two investors were awarded with the tender — Almar Water Solutions and Aqua Swiss.

Almar Water Solutions CEO Carlos Cosin said: “This project is on course and it is prudent not only for the people of Mombasa, but Kenyans in general. We shall start it in June 2019 and we expect to have water by 2021.”

In its website, the firm notes: “Almar Water Solutions will be responsible for the financing, design, engineering, and later operation and maintenance of the plants, supervising the entire process from the beginning stages until the project is transferred to the client.”


Unearthed scams show folly of political ‘merit’ in State jobs

By JAINDI KISERO
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The Kisumu oil jetty has been described as a bridge to nowhere.

Kenya Pipeline Company (KPC) initially planned to spend Sh1.4 billion in building the bridge but ended up spending close to Sh2 billion on it. Many months after it was completed, it remains idle, sticking out like a cathedral in the desert, at a location on the shores of Lake Victoria.

This is because the Ugandans are yet to build their own to receive vessels ferrying petroleum products from Kenya. We have been left at the mercy and precarious benevolence of the Ugandans.

HIGHER AUTHORITIES

I will say no more about this project because it is the subject of criminal investigations. However, observers will be waiting and watching the court proceedings to see how it determines the issue of culpability. A story in the Daily Nation on Monday cited correspondence that showed that decisions to proceed with the project were made by higher authorities.

We are at a critical juncture in the anti-corruption war and learning lessons on the nexus between graft and appointments based on patronage. The grumbling and noise by a section of Kalenjin political elite about how anti-corruption institutions are targeting public servants from their community are just but opening salvos of the reverberations we must expect. Stand by for more factional intrigues within the ruling Jubilee coalition.

PATRONAGE APPOINTMENTS

Yet, I don’t see the tempo of the anti-corruption crusade abating just because one side of the political coalition is loudly shouting about it.

President Uhuru Kenyatta has decided to throw his full weight behind the campaign. It is his response to the indiscipline and impunity that has been creeping back in the public sector over the past five or so years: The consequence of a very crass formula of patronage appointments the administration engaged in on coming to power.

You have to go back to the structure and contents of the unwritten pre-election deal that brought the coalition to power to appreciate how the whole thing ended up creating an environment where rent seeking became permissive.

TENDER MANIPULATION

The evidence is in the broad range of transactions that are now the subject of criminal prosecutions by the Director of Public Prosecutions, Mr Noordin Haji.

From the National Cereals and Produce Board, KPC, Kenya Power, Kenya Bureau of Standards, National Hospital Insurance Fund and the Ministry of Health, or the National Youth Service, what you will observe is a situation where Cabinet ministers and top officers of parastatals recklessly engage in manipulation and mismanagement of tenders.

Large infrastructure projects created with good intentions are turned into vessels for opening kickback opportunities for the political elite. Questionable procurements and budgets for projects are revised and contract variations and escalations implemented arbitrarily to allow the release of billions of shillings to well-connected contractors.

FREELANCE RENT-SEEKING

But where did the rain start beating the administration?

When they assumed the reins of power, the elite of the ethnic coalition neatly apportioned and doled out lucrative and key Cabinet and parastatal jobs mainly to the Kalenjin and the Kikuyu — the two ethnic communities that formed the bedrock of Jubilee Party’s support.

As expected, the arrangement created multiple centres of power. When you have that, an environment for freelance rent-seeking becomes an inevitability.

President Kenyatta has now decided to send a potent message. As he completes his second and final term, he will not allow public officials to — in the name of party solidarity — continue engaging in corrupt practices. Political protection for rent-seeking has suddenly evaporated!

KICKBACK OPPORTUNITIES

It seems the President has calculated that if he has to win the war on graft he must dismantle ethnic fiefdoms, cement personal power and settle the question about where ultimate political authority rests.

Part of the dynamics I have described was illustrated by the fight in May between factions of the coalition to influence the succession of the commissioner-general of Kenya Revenue Authority (KRA), Mr John Njiraini.

One Tuesday, the board of KRA, under the chairman, Dr Edward Sambili, convened for a special meeting to send Njiraini on terminal leave. But it emerged that the board had already been dissolved.

One of the greatest impediments to economic recovery are projects started just to open kickback opportunities to the political elite. Systemic corruption distorts incentives, undermines institutions and redistributes wealth and power to the undeserving.

So, let the music play on.


Over 90pc of roads are not tarmacked, report shows

By PATRICK LANG’AT
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Less than six per cent of Kenyan roads are tarmacked, with only 4,300 of the total 12,950km of paved roads in good condition, statistics by the Kenya Roads Board has shown.

At least 6,212km of tarmacked roads are classified as being in a fair condition, with 2,429km classified as poor. A total of 122km are currently under construction.

“A bigger percentage of the unpaved country network is either poor or very poor, indicating the need for more resource allocation to upgrade the standards,” the board’s report showed.

Overall, however, the road network condition in the country has improved, with 57 percent of roads now classified as either good or fair, up from 44 percent in 2009.

226,033 KILOMETRES

Kenya has a total of 226,033km of road, but with only 161,451 having been classified. A total of 39,995 kilometres of classified roads are categorised as national trunk roads, with 121,456km classified as county roads. Of the total 226,033km, 82,132 are gravelled, with 71 percent of them classified as being in either a fair or good condition.

The vast majority of roads in Kenya are earthen, with about half of them (52 percent) classified as poor.

The ruling Jubilee Party had identified construction of roads as a leading campaign promise in 2013 and 2017, promising a total of 10,000km of new tarmac roads by 2022.

In its annual report, the board did not say how many kilometres they have done so far, but Transport Cabinet Secretary James Macharia was optimistic about the progress so far.

FUNDING SOURCES

He, however, said the funds to maintain and construct the roads were inadequate, given the Sh400 billion “huge maintenance backlog”.

In its budget this year, the board has allocated Sh23.6 billion to highways, Sh12.4 billion to national rural roads, Sh8.2 billion to county roads, and Sh5.8 billion to national urban roads. A total of Sh5.7 billion will be used for emergency, while Sh570 million has been allocated to the national park roads. “The ministry is pursuing alternative funding sources,” Mr Macharia said.

Similarly, the CS said, the ministry is looking to adopt performance-based contracting for road maintenance, and the adaptation of cheaper construction materials.


Change tack to successfully eliminate counterfeit goods

By JOSH KIRIMANIA
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The crackdown on counterfeit and illicit goods by the multi-agency team since its establishment on May 10 was a welcome relief to manufacturers, who have borne the brunt of the vice for a long time but, six months later, the trade continues to flourish.

One reason for the slow progress is that the team lacks the wherewithal to have the culprits expeditiously prosecuted and convicted, with obstacles such as counter-accusations and claims by defence lawyers that delay and often derail the course of justice.

CONVERSANT

To enhance the team’s performance, the Attorney-General, as the chief adviser to the government, should arm it with standard operating procedures to make its operations expeditious. Investigations should be watertight, clearing all the grey areas of its mandate to improve its veracity and effectiveness.

Secondly, the war should go regional — even global. The vice cuts across borders and, without the entire East African Community being on board, the government may not get the desired success. We must work with our neighbours on the logistic network support system.

Thirdly, make the team more conversant with the technical details of manufacturers’ intellectual property rights (IPRs). There are occasions when its agents have arrested and taken traders to court only to be challenged that the goods suspected to be illicit were actually legitimate.

Business rivals have used this loophole to fight competitors by calling for the closure of their businesses. Many traders have been subjected to harassment, only for their merchandise to be found genuine after a long process of verification.

Fighting the counterfeit and illicit goods trade requires a multi-pronged approach to be successful. Regular raids, arrests and prosecution of suspects are not a deterrent since the high returns from the trade are worth the risk.

A paradigm shift is urgently required to deliver the much-needed fatal blow to the counterfeit and illicit goods trade. Though the renewed crackdown is bearing fruit, the government ought to focus more on the policies and laws that make illicit trade attractive, key among them reduction of taxes to bring them on a par with neighbouring countries.

LEGITIMATE

Industry players have, on many occasions, argued that Kenya’s high cigarette tax regime is the main cause of the increase in the counterfeit and illicit goods trade.

In 1994, Canada’s federal government cut excise taxes on tobacco products by half and several provinces followed suit. Quebec slashed excise tax on cigarettes by 71 percent (from $29.61 to $8.61 per carton of 200 sticks) and Ontario 67 percent ($28.85 to $9.65).

That year, legitimate cigarette sales shot up by more than 50 percent — the first increase in over 10 years. And between 1994 and 2001, illegal carton seizures dropped by 93.6 percent.

Notably, during the low tobacco tax period, seizures of illicit cigarettes fell and legitimate sales rose. The explanation for this is simple: As taxes fell, consumers switched to legitimate vendors; profits on illicit goods cigarette reduced, as did the supply.

The trend was reversed following the country’s tax increases as the supply of counterfeit tobacco products rose and legitimate sales fell. Legal cigarette sales dropped by 10 percent in 2002 and continued to fall, though at a slower rate.

But illegal carton seizures climbed, reaching their peak in 2009, when the Canadian authorities reported nearly a million cartons of illegal cigarettes seized — more than double the previous peak in 1994. It is evident that an increase in cigarette excise tax results in increased cases of counterfeit and illicit goods trade. This is the position local industry players have maintained since the 2011 introduction of a single-tier cigarette excise tax regime.

Rather than spend more on anti-counterfeit measures, the government should cut taxes on tobacco products to be on a par with neighbouring countries. This will not only increase sales for legitimate cigarettes, but also the excise tax collected.

The government’s effort in fighting counterfeit and illicit goods trade is laudable. However, there is an urgent need for the harmonisation of excise tax within the region. Article 83 (2) of EAC Treaty 1999 obliges member states to “harmonise their tax policies with a view to removing tax distortions in order to bring about a more efficient allocation of resources within the community”.

That could be the permanent solution to the counterfeit and illicit goods trade menace in Kenya, and, indeed, the region.

Mr Kirimania is head of corporate affairs, Mastermind Tobacco Kenya Ltd. [email protected]


Matatu ban conundrum: Let’s bite the bullet, expand facilities

By ROBERT SHAW
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Last week’s aborted ban on matatus from the centre of Nairobi was an exercise in futility. It was a knee-jerk reaction that created more chaos and congestion than the traffic jams it sought to end.

The reason is simple: To allow more passenger cars on the road is to invite gridlock. Matatus may contribute to congestion but at least they ferry several passengers at a time. And they make up just over a quarter of the vehicles on the road. Most private cars are not full; many just have one or two passengers. They make up a third of the vehicles in the city centre.

Nairobi is not just the capital of Kenya; it is a regional hub for eastern Africa and hosts many conferences and meetings as a result. This, in turn, attracts a mass of human and vehicular traffic. More than half of all newly registered private cars are likely to be driven in Nairobi and its environs to feed this monumental demand.

PRODUCTIVE TIME

Public transport is largely by matatu. This may be a more efficient use of our roads than private vehicles but its volumes contribute to congestion. Putting the two together inevitably results in massive slowdowns, often turning into gridlock and the loss of millions of hours of productive time.

Whilst many private entities have moved out of the central business district, most government departments are headquartered there. One cannot avoid going to the CBD often, especially in search of goods and services offered by the national or county government.

The layout of Nairobi has always made the city prone to congestion. Only 12 percent of its land is allocated to streets and roads yet an average capital city requires 30 percent or more.

JOINT VENTURE

Secondly, many streets do not connect to the relevant vicinities; so, getting to and from a facility is often a complex and lengthy exercise.

Remedying this inherent problem means allocating more land for streets and roads. Among the several steps necessary is involving the national or metropolitan legislation or both. Where possible, one would use public land owned by the county or national government. Where it is privately owned, a joint venture would be necessary.

The benefit for the private seller is that adjacent land values would appreciate significantly. A good example of this is how the value of land adjacent to the Thika Superhighway has soared following its expansion.

This perennial flaw must be tackled. It is equivalent to conducting major surgery rather than give palliative medication. The problem is that it is a longer-term solution that will take time and involve considerable investment.

KEY JUNCTIONS

In the meantime, a number of remedial measures can be taken to help mitigate the congestion. One is to create bus stations outside the city centre at key junctions on the main roads — such as Adams Arcade, Galleria, Kangemi and City Cabanas — and allow only shuttle buses ferrying people to and from these junctions and the CBD.

Another would be to have a comprehensive light rail system from the relevant estates and suburbs to the CBD. The Syokimau-city centre rail route is a good example. This would involve upgrading or reviving a number of existing rail routes.

The catch is that it would require a lot of investment in existing and new infrastructure. But the beauty of this idea is that a number of these routes already exist, even if they have fallen into disrepair.

SH60 MILLION

With this alternative road and rail infrastructure in place, one can then ban private vehicles from entering the city centre.

A comprehensive, holistic and seamless plan must be put in place to provide transport to the people who have to go the CBD for work or essential services.

While costly, the decongestion plan would have massive economic benefits. It is estimated that Nairobi loses around Sh60 million a day in productivity and wasted fuel. Any dent in that figure would quickly justify the expense.


Atwoli reads scam in low-cost housing plan

By KENNEDY KIMANTHI
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The Central Organisation of Trade Unions has poked holes in the government’s National Housing Development Fund, opposing deduction from employees’ salaries before the necessary regulations and structures are in place.

Secretary-General Francis Atwoli said on Tuesday the fund meant for building low-cost houses has the makings of a scam. It is not clear what role employers and workers would play in the management of the fund, he says.

The governance structure of the fund, its implementation modalities and how companies with housing plans for their employees will be treated are also not clear, Mr Atwoli said.

MODALITIES

The fund was introduced in implementation of the government’s affordable housing agenda.

Kenyans will now have to contribute to this fund beginning January 2019 after the 2018 Finance Act introduced a mandatory 1.5 per cent levy on workers’ gross salaries.

The new levy is expected to come into effect upon gazettement of the regulations prescribing the requirements for qualification to the scheme.

“We have been pushing for the constitution of a tripartite board of government, employers and workers to ensure transparency and accountability of these funds. But the government has been reluctant.

“Until we know the rules of the game that will affect our 2.5 million workers, we will not allow any deductions. This will be the only way to hold the Executive accountable for their actions and or omissions in the housing plan,” Mr Atwoli said at a press conference at Cotu offices in Nairobi’s Gikomba area.

EMBEZZLEMENT

The fund risks being abused since the government has “resolved to eject workers and employers’ representatives from the National Social Security Fund and National Hospital Insurance Fund,” he asserted.

The Draft Housing Fund Regulations 2018 provide for voluntary membership for self-employed people. They also set out penalties for non-compliance on both the employers and employees.

The contributions are to be remitted on or before the ninth day of the following month. “Such funds require supervision to ensure workers benefit and to avoid embezzlement,” Mr Atwoli said.

Currently, Kenya needs at least 250,000 housing units every year to meet demand. This is against the annual average of 50,000 units delivered by the government and private developers per year.

The housing levy is expected to finance the government’s Big Four Agenda of affordable housing with employees who do not make use of the levy expected to get back their contribution after 15 years.


Embrace citizenship to save the soul of our nation

By CAESAR MWANGI
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Recently, President Uhuru Kenyatta rebuked leaders who always push for salary increases at the expense of other Kenyans.

He said: “With all due respect, everybody wants to live a good life, but before we as leaders live a good life, we should make sure that our people get the best.”

I was highly impressed by this statement but it was, sadly, rejected by MPs when it was reported in the dailies, “MPs defy President Kenyatta over push for higher perks”.

It reminded me about the concept of “citizenship” so eloquently championed by Theodore Roosevelt, touted as America’s first progressive president (1901-1909).

LOFTY IDEALS

In the well-researched book, Theodore Roosevelt and the American Political Tradition, authored by Prof Jean Yarbrough in 2012, Roosevelt is quoted as declaring that aspiring statesmen should be animated by “lofty ideals” that would speak not only to “the things of the body” but also to the “things of the soul”.

Roosevelt is well known for his insistence on the need to embrace citizenship for the good of the nation, having stated: “No nation can permanently retain free government, unless it can retain a high average of citizenship.”

Citizenship is a vital missing ingredient in the challenging quagmire of our clueless and directionless leadership paradigm obsessed with an extractionist mentality and suffering the disdain and loathing of discerning Kenyans.

AGGRESSIVE HONEST

Roosevelt suggested that qualities of good citizenship fall into three categories. First, it requires honesty and decency. Honesty should be understood in its broadest terms, “not merely the honesty that refrains from theft, but the aggressive honesty that will not see a wrong without trying to right it”.

The President saw the push for perks by the MPs as a wrong that would be perpetuated on the people of Kenya and set out to right it. There are many other Kenyans showing honesty and decency as they take action to right the wrongs in our society.

ANTI-GRAFT FIGHT

Without being exhaustive in this regard, I am impressed by the media’s eye-opening campaign to expose the underbelly of the mind-blowing corrupt dealings.

Secondly, citizenship requires strength and courage. It does not matter how honest a leader is; if he is timid, there is little chance of being useful to the aspirations of a better nation as “good work can only be done by those who are not afraid to step out into the hurly-burly to do their part in the dust and smoke of the arena”. He lamented good people who only complain from the comfort of their parlours. We have an increasing number of men and women embracing citizenship. The great efforts being made by the DPP, Mr Noordin Haji, in the fight against corruption is an unquestionable display of citizenship.

COMMON SENSE

Thirdly, citizenship requires the saving grace of common sense. People need to embrace not only the virtues that teach us to refrain from wrongdoing but also those that teach us to progressively and aggressively do right and pursue the ideals with prudence and consistency within our sphere of influence.

Despite the many acts of wickedness that keep on being perpetuated on the citizenry, let us develop in us the lofty ideal of citizenship and with courage admonish and ostracise those who display the common antithesis of citizenship through greed and unchecked self-interest. Then, and only then, shall our nation be truly great.


IEBC proposal sensible

By EDITORIAL
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The deputy governor position is the missing link in efforts to further democratise and enhance governance. This becomes more evident in case a vacancy occurs during the term.

Nairobi City County, for instance, has been without a deputy governor since Mr Polycarp Igathe quit nearly a year ago after he fell out with Governor Mike Sonko. The vacancy also took a long time to fill in Nyeri after then-deputy governor Mutahi Kahiga took the helms following the death of Dr Wahome Gakuru.

Governor Sonko appears not in a hurry to pick that principal assistant, and not without a hint of mischief as he, at some point, even proposed his fierce critic, lawyer Miguna Miguna, for the job.

As has been pointed out by observers, there is a lacuna that can be exploited to deny the electorate the vital role that a deputy, as the running mate of the governor, is expected to play. It makes a mockery of the system to keep such an office vacant at the whim of an individual. It is unfair, undemocratic and a blatant abuse of the system. Filling the vacancy should not be left to one person, who might dilly dally if it doesn’t suit their interests.

It is against this backdrop that the Independent Electoral and Boundaries Commission (IEBC) proposal that it be granted the right to vet deputy governors who take up the position in the middle of an election term makes plenty of sense. We fully agree with chairman, Mr Wafula Chebukati, that the nominee should be subjected to the same scrutiny as the election running mate.

Of course, the governor would still pick a candidate but the IEBC would ensure that the nominee fits the bill. This will ensure that the office is occupied by a person who can ably discharge the duties for the public good.


Use Jamhuri Day fete for national renewal

By EDITORIAL
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As the country marks the 55th Jamhuri Day anniversary today, this, as always, is a solemn moment for reflection and stocktaking. It is a reminder of the sacrifices made by gallant men and women who fought for independence, leading to the transition of power from the colonial administration to locals.

Independence accorded Kenyans a chance to make self-determination about their destiny as a free people. At the time, the goal was to unite the country and create structures that would ensure prosperity. Years of colonial exploitation and misrule had left the country divided and resources plundered, which was the reason the Founding Fathers rallied everyone towards nation-building.

For us, the question is how far we have walked the journey and the achievements realised. Five decades of self-rule and independence have recorded mixed results. On balance, the country has made significant achievements towards socio-economic and political development. Kenya is a vibrant economy in a strategic location. We have achieved a level of political maturity characterised by regular elections and political transitions. The challenges enunciated at Independence, such as poverty, hunger and ignorance, have been tackled with relative success.

HISTORICAL INJUSTICES

In recent times, a more fundamental development was the enactment of a Constitution in 2010, which sought to redress historical injustices and set the country on a pedestal for renewed growth. With it came devolution that reorganised governance structures and resource distribution, giving people at the grassroots a chance to make decisions on matters affecting them.

However, old challenges have persisted as new ones evolve. Ethnicity has continued to define social and political relations. Whereas efforts have been made to create a united nation, divisions persist along ethnic lines and are perpetuated by the political elite for their survival. Past elections have been characterised by internecine wars that, on occasions, threatened to destroy the very foundation of the nation. Outcomes of last year’s elections nearly took us down that path of destruction until the main protagonists, President Uhuru Kenyatta and opposition leader Raila Odinga, saw sense and made peace through a handshake.

A veritable threat to the country’s prosperity is corruption, which has badly eaten into the fabric of the nation. For years, public resources have been plundered by individuals in authority yet little has been done to tame the vice. It is only in recent times that the government has demonstrated renewed commitment to prosecuting the suspects. This must continue in earnest and culprits punished to send a stern warning against potential offenders.


PSG ease into Champions League last 16

By AFP
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Paris Saint-Germain qualified for the last 16 of the Champions League on Tuesday after winning 4-1 at Red Star Belgrade and topping Group C.

First half goals from Edinson Cavani and Neymar set the French champions on their way, before Marquinhos and Kylian Mbappe sealed the points after Marko Gobeljic volleyed one back for the hosts early in the second half.