Suspect deals in dash for South Sudanese projects
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By Jaindi Kisero
May 11, 2011 — If you are a consultant and you want to make easy
money, the place to go is Southern Sudan. Kenyan engineering
consultants are colluding with some top government officials there to
win multiple multi-million projects, most of them awarded without
competitive bidding.
Last week, a senior government official from Juba, who said he had
been referred to me by an older contact, came to my office with
documents to show how a Nairobi based engineering consultancy firm was
charging an arm and a leg for supervision of infrastructure projects
in several towns in Southern Sudan.
I will not give details at this stage because some of the documents my
source has provided do not disclose a watertight case of
irregularities by this Kenyan firm.
What is clear, however, is that systems in the country are so loose as
to lend themselves open to manipulation by crafty contactors and their
collaborators within government.
I have seen a case where some senior South Sudan Government official
has authorized payments worth millions of dollars to Kenyan
contractors on hand written letters.
ALSO INTERESTING IS A TREND where payments are being channeled through
off-shore companies to evade taxes. My contact from Juba has shown
several cases where senior officials have instructed a local bank to
channel payments to Kenyan companies through off-shore accounts in
Mauritius.
When you channel payments through off-shore accounts, you make it
possible for contractors and their collaborators to pad these
overpriced contracts with kick-backs, which are then laundered back to
the government officials involved.
The point here is that the biggest threat to sustainable peace in
Southern Sudan is not just politics. The bigger challenge is the
emergence in the equation of a noveau riche - a parasitic group mainly
of civil servants bent on using their positions to enrich themselves
by colluding with consultants to pad infrastructure contracts with
kick-backs channeled through off-shore accounts.
If this group is allowed to entrench itself, the government in Juba
will have squandered the goodwill from the international community and
donors who have been falling over one another to commit resources to
the development of the nascent state.
If the situation is not corrected early, it is these allegations about
corruption we are hearing now that will start for mending discord
within the elite of the ruling Sudan’s People Liberation Movement,
making it difficult for the infant government to stabilize and speed
up the rebuilding of the country.
Experience has shown that infrastructure projects, involving the
building of dams, roads, ports and airports are prone to corruption
and underhand dealings.
Often, the situation is worse in developing countries which neither
have transparent procurement procedures and laws, nor strong oversight
institutions to scrutinize agreements with contractors.
A country like South Sudan is a paradise for crafty contractors. And,
they employ several tricks to cream off money from projects.
Where they are forced to bid competitively for the projects, they will
make sure that they undercut others by offing ridiculously low prices
during the initial tendering stages.
CONTRACTORS USING TRICKS TO CREAM OFF DONOR MONEY
By once they clinch the deal, they will then collude with government
officials to vary the contracts for every imaginable excuse,
eventually pushing the cost way beyond what was offered by other
bidders during the competitive stages.
In most cases, the contractors will collude with officials to craft
agreements in a manner that allows payments of hefty advances at an
early stage so that a large proportion of the agreed kick-back is due
before there is any risk of the project being terminated of scaled
down as a result of donor pressure.
The documents from Juba clearly show that all these things are
happening in some to the major urban infrastructure projects.
The government should follow up some of these companies to determine
whether or not they are paying taxes on the big monies they are
making.
IN A SENSE, WHAT IS HAPPENING in Southern Sudan is not entirely
surprising. Southern Sudan is a good place to chase economic rents
because the bureaucracy there is manned by recent returnees who are
vulnerable to manipulation by crafty businessmen.
Indeed, Southern Sudan is the new frontier for crafty wheeler dealers
– cowboys chasing quick money.
The trend these days is that wheeler dealers will scramble for
projects in countries with weak procurement laws, inefficient judicial
systems, weak parliaments and unstable politics.
The best our government can do is to ensure that the Kenyan firms
implementing those lucrative infrastructure projects in Southern Sudan
remit taxes to the Kenya Revenue Authority.
Jaidi Kisero is reachable through [email protected]
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