How Ex-KPA boss purchased new tugboats at a higher cost

Dr Daniel Manduku Ex Kenya Ports Authority (KPA) Managing Director

It all started in December 2018 when Kenya Ports Authority (KPA) Board confirmed Dr Manduku as the Managing Director. The authority’s previous manager had already kicked off the process of acquiring new tugboats to boost efficiency and crucial marine operations at Kilindini and Lamu ports

By The Weekly Vision Online

Disgraced Kenya Ports Authority (KPA) former Managing Director Dr Daniel Manduku and a section of his top managers are alleged to have colluded with senior managers of a leading commercial bank with operations in many African countries in defrauding the Authority hundreds of millions of taxpayers’ monies, The Weekly Vision Online can reveal.

This fresh revelation is likely to attract the attention of the DCI, EACC and the office of the DPP as it contravenes the Public Procurement and Disposal Act that bars a State or Public Officer from engaging in such profiteering.

It all started in December 2018 when Kenya Ports Authority (KPA) Board confirmed Dr Manduku as the Managing Director. The authority’s previous manager had already kicked off the process of acquiring new tugboats to boost efficiency and crucial marine operations at Kilindini and Lamu ports. Dr Manduku had served as MD in an acting capacity from May 31, 2018, following the exit of Ms Catherine Mturi-Wairi.

All the laid out plans for the purchase of new tugboats by Ms Catherine Mturi-Wairi’s administration soon changed when Dr Manduku assumed his new role as MD. He immediately identified a new supplier in China, away from the Europeans who had been identified by the previous management. The price of the tugboats also changed from the budgeted price of Ksh. 1.1 billion by the European supplier to 1.7 billion for the new Chinese supplier. The decision to settle for Cheoy Lee Shipbuilders of China was solely Dr Manduku’s.

KPA officials negotiated with their bank counterparts to get favorable foreign currency exchange rates for the payment of the tugboats purchased from China. The payment was made in favor of Cheoy Lee Shipbuilders bank account in Dubai

The Chinese shipbuilder eventually delivered the new 75 Bollard Pull (BP) tugboat Christened EUGENE, Azimuth Stern Driven (ASD) tugboat for Kilindini port and another one, a pilot boat worth KSh.600 million for deployment to Lamu Port. KPA officials negotiated with their bank counterparts to get favorable foreign currency exchange rates for the payment of the tugboats purchased from China. The payment was made in favor of Cheoy Lee Shipbuilders bank account in Dubai.

It meant that under the KPA-Bank favourable foreign currency exchange arrangement, the state corporation paid more to the shipbuilder, in return, the rogue KPA officials made arrangements with the shipbuilder to wire excess cash to a special bank account also in Dubai as kickbacks to be shared amongst KPA officials, brokers in Nairobi and the bank managers. The brokers then travelled to Dubai to pick their loot to share between KPA, Brokers and bank managers.

I essence, KPA purchased currency in the Kenyan market at a lower price and simultaneously sold it at another market at a higher price in what is known as risk-free arbitrage. Soon after the deal was sealed and money paid out, Dr Manduku is alleged to have acquired properties in Kitengela, Machakos County, the brokers bought high-end homes in Nairobi and other areas of Kenya.

In an unrelated scam to this one, the DPP Noordin Haji in August of 2020 also approved the prosecution of Dr Daniel Manduku over irregular procurement of works at the port. The DPP said that “Manduku authorized and approved the procurement of the manufacture of concrete barriers at the Inland Container Depot, Kilindini Port and Makongeni Goods shed without an approved budget and procurement plan for the 2018/2019 Financial Year.

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