Mwalimu Mati: Why Passat Saga Stinks to the Skies - The Star

Treasury is perpetuating fraud on taxpayers.

The Passat replacement scheme is uneconomical and could facilitate the outright theft of public resources.

Apart from the obvious blatant contempt for procurement procedures involving single sourcing by government in its latest vehicle policy scheme, a little known Treasury press statement of December 2008 and missing information in the subsequent 2009 National Budget suggests Kenyan taxpayers should be very concerned.

On December 14,2008, the Nation published a story titled " Public vehicles on sale at throw away prices" stating that about 2,000 government vehicles earmarked for sale under a reformed transport system were being sold off at incredibly low prices - as little as Sh500 in some cases. Many vehicles were bought by well-connected individuals and companies through questionable deals.

The cars were being auctioned in line with a transport policy announced by the then Finance minister Amos Kimunya during the 2006 Budget speech. The sale was expected to save the Treasury about Sh1.3 billion yearly in fuel and maintenance costs.

In a press statement, the Financial Secretary immediately retorted, "Nothing could be further from the truth" than the Nation story.

The Financial Secretary stated that Treasury records indicated that by then only 488 vehicles had been sold through open tender rather than the 1,210 stated in the Nation.

According to the Financial Secretary, the sale had realised a total of Sh194,061,335 which had already been paid to the Exchequer.

The same official stated that another 811 vehicles were advertised for sale which had closed on November 25, 2008 and were awaiting tender awards. Finally, the official claimed that a further 789 vehicles were under the process of being sold and advertisements were due in early January 2009.

In total by December 2008, the Treasury had collected 2,088 vehicles from various ministries and departments. According to the Treasury, the process of surrender would continue until all 2,213 targeted vehicles were accounted for.

The reason for the surrender of the vehicles in 2008 was the very same as that behind the 2009 surrender scheme.

During the presentation of the 2008 Financial Year Budget Statement, the Minister for Finance announced the introduction of a new transport policy to address weaknesses in the existing transport policy.

When he presented his budget for the financial year 2009/2010, the new Finance minister Uhuru Kenyatta disclosed the following as monies received from sale of motor vehicles for the year 2008/2009. Receipts from the sale of vehicles and transport equipment indicated Sh14,069,080

Receipts from the sale of vehicles and transport equipment were Sh756,000.

What happened to all the money raised by the Treasury from its reported sale of 2,213 motor vehicles surrendered? What happened to the Sh194,061,335 that Treasury claimed to have received for 488 cars? What about the money from the sale of the other cars?

Uhuru was also required to indicate in his estimates for financial year 2009/2010 the amount he would raise from the sale of unneeded or surrendered cars.

He told Parliament that he expected during this financial year Sh15,384,640 and Sh1,726,000 paid to the Exchequer. Where are the savings from the 120 Passats? Is this not yet another Government con?

The total expenditure on cars in 2008/9 was Sh8,253,566,848 and in 2009/10 it is expected to be Sh8,013,271,106. The income from the sale of cars in 2008/9 was Sh14,825,080 and in 2009/10 it is expected to be Sh17,110,640.

The current Passat controversy revolves also around the Treasury's unusual decision to procure without any competition 120 VW Passats from CMC Holding.

This company features in the external debt register as having lent the government $24.2 million for the purchase of 522 Land Rovers for the Office of the President in June 2003 without Parliamentary approval.

Later the debt was collected on by Standard Bank London.

These prior dealings with CMC should have made Treasury even more scrupulous in following the Public Procurement laws to the letter.

Is this Passat deal going to blow up in our faces in the future in the Anglo-Leasing vein?

Will a debt show up on the External Public Debt Register in the future?

We insist that the external debt register be tabled in Parliament immediately so that we know what the government has borrowed and paid on our behalf.

Treasury was asked for the document by Parliament on June 3 and to date has refused to table it for scrutiny.

Mwalimu Mati is the CEO, Mars Group.

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