Suspect deals in dash for South Sudanese projects

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]