Business highlights – Corrupt CEOs to face Ksh5 million fine as EACC looks into sketchy procurement sector

Corrupt CEOs to face Ksh5 million fine or 10-year jail term 

  • Ethics and Anti-Corruption Commission boss, Eliud Wabukala has vowed to have corrupt CEOs put behind bars
  • Senior chiefs of private companies who bribe government officials to win state tenders will be pursued and investigated for prosecution and conviction
  • EACC will put in place preventive measures to curb the practice

Speaking yesterday, the Ethics and Anti-Corruption Commission Chairman said the public procurement sector is the biggest source of corruption and bribery running into tens of billions of shillings every year. Wabukala said the anti-graft agency will build strong cases against chief executives involved in corruption in collusion with state officers under the 2016 Bribery Act.

Ethics and Anti-Corruption Commission Chairman

The new law, which was proposed by the private sector, has addressed the gaps in the judicial systems that made it difficult to sue the giver and taker of bribes, the graft czar said, adding the vice is rife in international tendering. The Bill was passed by Parliament on December 1 and assented to by President Uhuru Kenyatta on December 23, 2016.

READ ALSO: MPs lash out at DCI boss Muhoro over delayed corruption investigations

Other penalties include barring the guilty directors from serving in any other company for up to 10 years, and being fined up to five times the bribe received or given. The Act criminalises corruption, and it is the first law to target private firms who for long have been left outside the ring of graft purge.

Wabukala said the commission is benchmarking with the UK’s Bribery Act where successful prosecutions have taken place. He was speaking in Nairobi during a forum on the Bribery Act organised by the Kenya Association of Manufacturers. Central Bank Chairman Mohammed Nyaoga and Governor Patrick Njoroge asked the government to implement the law to the letter.

Kenya receives approval for direct flights to the United States

  • Kenya will launch direct flights to the United States earlier than planned
  • The Federal Aviation Administration (FAA) has approved non-stop air travel between the two countries
  • East Africa’s economic powerhouse plans to boost exports to Washington and increase visits by American tourists

Inspectors from America’s FAA gave Jomo Kenyatta International Airport a clean bill of health after an audit leading to the award of the long awaited Category One status. This sets the stage for signing of flight agreements between Washington and Nairobi as well as airlines seeking direct flights between the US and Kenya before commercial operations can start.

The second class status of JKIA means passengers flying from Kenya to the US have to transit through Europe, the Middle East or any of the four African countries whose airports have achieved the Category One status. These are South Africa, Ethiopia, Cape Verde, and Nigeria.

Delta Airlines, a major US-based carrier, previously set a launch date for direct flights but cancelled due to security concerns.

READ ALSO: Jambojet begins operating all of KQ’s scheduled flights to Malindi, Ukunda, Lamu and Eldoret

National flyer, Kenya Airways also plans to offer direct flights. US traffic usually transits through hubs like Dubai and Amsterdam. JKIA failed the US safety review in 2013 but has since improved security through upgrades.

New terminals have been opened over the past three years, allowing the airport to separate departures and arrivals, which is a key security requirement.

Taxpayers to shoulder Ksh4.6 billion burden for Lake Turkana wind power project

  • Consumers will pay Ksh4.6 billion to a special fund created to cushion Lake Turkana Wind Power investors from losses
  • The money will be collected from consumers in the form of higher power bills
  • The cash will be put into security support facility account that the Treasury has jointly created with the Energy Regulatory Commission (ERC)

ERC Director of Electricity, Joseph Oketch said the contingency facility will take care of risks associated with Kenya Power’s payment obligations to the Lake Turkana power investors. Mr Oketch said the move is in line with a global practice that allows governments to set up contingency funds to manage risks for private investors. He explained that the move is crucial to maintaining Kenya’s profile as an investment destination.

The Treasury declined to offer the project a government-backed letter of support that cushions private investors from unforeseen political and economic risks. The guarantees are, however, booked as national debt, and have the effect of pushing up the country’s debt, currently standing at Ksh3.8 trillion, or half the gross domestic product (GDP). The special fund was created as part of an agreement that required consumers to raise the amount once the 310-megawatt Lake Turkana power project began supplying at least 50-megawatts to the grid.

READ ALSO: Cost of power set to fall as KenGen invests Sh800 billion in geothermal, wind energy

The wind farm, which is billed as Africa’s largest wind project, is set for completion in July and at full capacity will produce enough electricity to power one million homes.  Electricity from the wind park will cost Ksh8.7 per unit (8.5 US cents), which is in a similar cost range as geothermal power, or three times cheaper than diesel-generated electricity.

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