Irony of unpaid mask supplier, millionaire Covid tenderpreneurs

 

Rajan Dhanani, the owner of Nairobi Enterprises Ltd, was invited in February last year by Kemsa directors to supply the entity with face masks.

However, his hopes have turned into frustration and an endless wait for payment amid the appetite for quick money by tenderpreneurs that have parastatals in control.

Having been in business since 1984, Dhanani was at that time exporting face masks to China and Hong Kong at the height of Covid-19.

China was not able to produce masks at that time following the total lockdown imposed by its authorities.

Following the lockdowns, there were few manufacturers of facemasks outside Kenya, so NEL was overwhelmed by the demand.

The firm is among dozens questioned by the National Assembly’s Public Investments Committee which is probing the Sh7.8 billion PPEs scandal.

The manufacturer told MPs that they offered to supply Kemsa with facemasks at Sh2,000 for a 50-pack or Sh400 per piece, but is yet to be paid about Sh200 million.

In what casts a clear contrast, companies that were formed early last year, and whose supplies cannot be confirmed have been paid billions of shillings.

Some of the said companies quoted prices as high as Sh4,500 for 50-pack or rather Sh900 per mask.

Auditor General Nancy Gathungu said in a special audit that taxpayers may have lost Sh2.3 billion already paid in the flagged dealings.

Dhanani said they were asked to write a letter of intent, which they provided, and stated delivery timelines.

The manufacturer says they sought documentation before they could initiate any supplies, and were subjected to a tender process.

“The call for letter for intent came after they asked us if we had stock, and we agreed we could squeeze them in the chain,” Dhanani said.

 “We told them we could not supply without an LPO in the first place. In terms of legalities, we tried to cover ourselves in terms of the legal aspects.”

“From there, they said there is a bid we have to do. We bid for the tender and they called us for price negotiations,” he said.

Kemsa replied to the letter of intent on March 2 after which NEL started supplying on March 17, having received LPOs on March 13.

Dhanani says they agreed to slightly reduce the price and supplied within the agreed timeline.

Lawmakers at the PIC said the firm’s account of events painted a sorry picture of the government’s commitment to supporting local manufacturers.

PIC chairman Abdulswamad Nassir expressed regret that prequalified Kenyan companies that supplied cheaper, and on time, have not been paid.

“It is very immoral that Kenyan companies whose capacities are known for so many years have not been paid yet those that had just been formed the other day were paid in a week,” the Mvita MP said.

Among them are dozens whose owners walked into Kemsa and bumped into multimillion shillings from which they have secured the payment.

One such was a grains supplier that was paid Sh167 million within days of delivering PPEs, three-ply facemasks, and KN95 masks.

Briema Grains Supplies Ltd did not bid any tender; is not prequalified for medical supplies, hence had no expertise to deliver the tender.

Bennet Ventures Ltd, one of the firms, was paid Sh180 million and so was La Miguela Holdings owned by a passerby who landed Sh180 million.

Aszure Ltd, linked to a former senior EACC official, was paid for supplies worth Sh347 million.

It is very immoral that Kenyan companies whose capacities are known for so many years have not been paid yet those that had just been formed the other day were paid in a week

PIC chairman Abdulswamad Nassir

Nassir wondered how Kemsa could pay such firms, adjudged to be in breach of the law, and treat differently, another that insisted on following the law.

“It is baffling that a company that actually refused to supply on a mere commitment letter was 40 per cent cheaper, and employs over 240 is being frustrated yet those with one or two directors were paid in weeks.”

Dhanani said they were informed by Kemsa that their payment, which MPs hailed as straightforward, was among those stopped by an ongoing EACC probe.

None of the companies that have been paid provided credit notes, Nassir said, adding that it should not go without notice that Kenya exported face masks when everyone else was scrambling to import into the country.

“Of all companies, NEL is the only one that did not do supply without the tenders. They are among Kenyans who strived to do things the right way.”

For Briema, Nassir said it was unfortunate that some people simply did their part, went home for their prayers, and were paid. BY THE STAR