Media 1st

Kenya, Uganda agree on crude oil pipeline route

2015-08-10T13:49:00.001-07:00

Kenya, Uganda agree on crude oil pipeline route

Opinion: Orange Kenya adverts unlikely to change perception about Safaricom

2014-02-20T00:38:00.001-08:00

The latest campaign by Orange Kenya to compare its off-net and on-net prices against those of market leader Safaricom has elicited a lot of sober conversation in the market but is unlikely to change the market perception and loyalty to Safaricom. In the advertisement that is on newspapers, online as well as audiovisual media the France owned teco puts into assumptions various factors in its attempts to woo customers from Safaricom. Largely the classifieds assume that the majority of the 20 million Safaricom customers are likely to be unaware of the costs discrepancies between their current operator and other market options. The commercial also assumes that Kenyans are largely in Safaricom because of the voice services offered by the telecommunications giant. In this two assumptions Orange Kenya hopes that the advertisement will enlighten customers of which operator is actually ‘the better option’ and that Safaricom has achieved its loyalty purely because of its telecommunications services rather than a culmination of activities including community service, its Kenyan background and its persistent innovation. To discuss the price factor let us first remember that Orange Kenya is not the first telecommunications company to pick up a fight with Safaricom by triggering a price war. In fact almost all battles with competitors have been price related including one fuelled by Airtel in 2011 as well as another by Yu which the most ruthless was pricing free on net calls. In the many wars that have been witnessed in the telecom battlefield Safaricom has always emerged the winner though sometimes scathed such as in 2012 when there was a drop in profits. However during the same period the other three operators made losses leading to concerns being raised on the consequences of such price wars from including the current CEO of Orange Kenya Mickael Ghossein who said that the losses witnessed in the industry could actually lead to low investment in infrastructure. So what has actually changed? To date let us remember that only Safaricom of the four operators is making a profit. The point here is that Safaricom customers have for long known of the cost element in remaining with the green operator. Orange also assumes that voice services alone call lead to large migrations from Safaricom not realizing the huge number of Kenyans using Mpesa and other value added services such as lipa na mpesa, vuma online internet for matatus, m-cow among others. This has for long been the strong hold for Safaricom hence the loyalty the company exerts. Safaricom is also the only telecom that is seemingly investing in apps developments which it also avails to its customers. In the era of smartphones and the increasing local uptake of the devices should shape the direction of products telcos should take. Orange Kenya also hopes that a majority of Kenyans who witnessed its services while it was the market leader could have slowly forgotten its inadequacies to slowly flow back to its platform. Safaricom is without doubt a darling of many Kenyans due to its CSR activities with various local events sponsored by the company many of whom would not risk losing out various benefits to an international company. Above all Safaricom has succeeded in branding itself as a Kenyan success story with roots deeply originating in Kenyan soil and any mind changing commercial will foremost require customers lose their patriotism.

CCK WARNS RIVER ROAD FAKE PHONES PROGRAMMERS

2012-10-08T05:10:00.003-07:00

The communication commission of Kenya has sounded a warning to all vendors reprogramming switched off counterfeit phones for reentry into the market. According to CCK director general Francis Wangusi the commission has received information that certain vendors in downtown Nairobi have been revamping the fake phones and is currently tracking them together with the relevant authorities for prosecution. According to the commission communication of Kenya statistics over 1.4 million fake handsets had been turned off by last Friday by various network providers in the country. Among those switched off it has emerged included certain genuine handsets most of which had been issued for testing by network providers as well as a number of handsets offered to users by international phone providers under contract only to enter the country illegally. And with thousands of Kenyans affected by the switch off it is also emerging that a number of crafty Kenyans from downtown Nairobi have started restoring the turned off handsets. The commission is now warning any such individuals risk imprisonment of up to 5 years or a fine of 1 million shillings is caught. Speaking at the same function which was discussing the development of quality of service information PS Bitange Ndemo noted that fake handsets were a major cause for deteriorating quality in the various network. He noted that now the switch of had gone as planned it was time for network providers to improve their service asking parliament for tougher penalties to providers who offer services below par. This comes even as it merges that none of the operators in the country passed the quality of service assessment in 2011. Ndemo has also asked the CCK to enter into a quality level agreement with network providers to ensure that service quality is improved.

BANKS TO LOWER LENDING RATES STARTING MONDAY

2012-09-28T02:45:00.002-07:00

Investors can rest this weekend with held breath as they await lower interest rates starting coming Monday with most banks having announced lending rates will fall below 20%. Already several banks have indicated that they will be reduce rates among them KCB, Co-operative bank and CFC. On September 5th the central bank cut its base rate by 350 basis points to 13% from 16.5% when it again cut the CBR by 150 basis points. As a result of the second cut a number of banks moved in quick to announce that they would be reducing their base lending rates. CFC announced that it would reduce its lending rate to 19.5%, while Kenya commercial bank announced it would reduce it to 19% from 22%. Standard chartered also announced that it would lower its lending rate from 21.5% to 18.5% one of the most competitive rates in the market. However other banks that have lowered their rates will not take effect until mid October including CFC bank, commercial bank of Africa and diamond trust bank which lowered by 3.5% to 19%. Customers of Barclays bank which has lowered its rate by 1.5% to 19.5% and Housing finance to 18% will also have to wait till 15th October to enjoy the cut. Ecobank which has cut its rate by 3.5% however remains above the 20% mark with its lending rate at 21.5%. Several banks have however yet to cut their rates. Mortgage has however seen a more significant drop following the cut with Stanchart offering the takeover offer interest for a mortgage at 16.9%, while KCB has reduced its mortgage rates to 18%. In the same category I&M bank has fixed its floating rate for new mortgages at 18%. With this statistics the building and construction sector can be said to stand out as among the sectors expected to be the biggest beneficiaries after suffering heavily following the increment with growth having dropped from double digit in 2011 to just above 5% in 2012 as mortgage and the cost of capital simply spiraled out of control. Expansion by the private sector is also expected to take root after months of stagnation with launch of new products also expected to manifest the effect of cheaper credit. With a number of banks yet to reduce their rates however it is expected that they will face new pressure from especially borrowers and the central bank which has expressed it will to have the economy back to a higher growth trajectory. In August a bid by Gem MP Jakoyo Midiwo to have interest rates offered by banks stipulated by the CBR met resistance in parliament before been defeated among accusations of bribery by the financial institutions.

PARLIAMENTARY LABOR COMMITTEE SAYS GOVERNMENT IS FRUSTRATING ITS INVESTIGATIONS INTO KQ RETRENCHMENT

2012-09-25T05:38:00.004-07:00

Retrenched Kenya airways workers have taken to the streets protesting their layoff while at the same time calling for the sacking of the chief executive Titus Naikuni. This comes even as the industrial court extended orders issued to the airline to stop retrenchment on 14th September after it emerged that the file had gone missing. Enraged retrenched Kenya airways workers took to the streets to protest their retrenchment that saw over 600 employees laid off. The workers who visited parliament buildings and the prime minister’s office seeking audience complained that the airline has moved ahead and employed over 200 new foreign workers following their layoff. "How many Kenyans are employed at British airways for the last many years it has been around. The motive of the government financing KQ and its rights issue was to earn Kenyans employment not Indians, Cameroonians, Thais and the rest." said a disgruntled retrenched cabin crew member Mr. Oyee. They urged the government which is the main shareholder to intervene. At the same time the employees were enraged by news that the file in the industrial court had gone missing calling it suspicious. "We cant believe the habit is back again. Mr Mutunga (Chief Justice) must produce file no.1616 or open a new file today." Mr Oyee added. Following the missing of the file the court has extended the orders issued on 14th of September compelling Kenya airways to stop the retrenchment . Meanwhile the labor committee probing the Kenya airways retrenchment adjourned after the permanent secretary of transport who was representing the minister could not provide any further information. The permanent secretary said the short notice by the committee has made it hard for the minister or his assistant to attend. A similar hearing meant with the acting CEO of the capital markets did not kick off as the CEO was said to be away. The members of the committee said this were theatrics by the government to slow the committee from presenting the report as scheduled.

PARLIAMENTARY COMMITTEE UNEARTH'S GRAVE DISCRIMANATION AND CORRUPTION PRACTICES AT KENYA AIRWAYS

2012-09-24T09:09:00.000-07:00

A hearing by the parliamentary committee on labor has unearthed what could be grave corruption and discrimination at Kenya airways. The committee that was sent up by the national assembly to address the issue of retrenchment by the airline heard that the company might have targeted workers based on gender with pregnant and sick employees. The Sofia Abdi led committee has also heard of cases where the airline bought second hand jets worth billions in pretense they were new. and what was supposed to be a hearing that was meant to address the issue of retrenchment widely thought to be cost cutting measures slowly turned to be a story of breaches of the constitution and unlawful procurement practices. As soon as the committee started it emerged from those affected that the airline could have targeted people based on the gender with among those affected being pregnant employees and those already in maternity. The committee heard in disbelief how the company fired employees withdrawing their services while on duty some whom are said to have been fired midair exposing the passengers to grave harm. Those affected told horrifying stories of how the company withdrew medical insurance with some who were in hospital now unable to clear their bills. Similar questions were asked on KQs hiring of foreigners despite having fired 600 Kenyans.the union told the committee how the company had already gone ahead and employed foreigners mostly from India, Thailand,Ghana, Cameroon, Rwanda and Uganda who were being paid huge salaries almost triple their local colleagues. Aviation and allied workers chairperson Perpetua Mutua shocked the committee with revelations of rampant corruption and impunity at Kenya airways. Mutua told the committee that most of the recently acquired aircraft that were said to be new were in fact second hand with one having been used in Hong Kong for more than six years. She also revealed of an incidence where two new Embraer aero planes have surprisingly had similar serial numbers. The union rejected claims that KQs wage bill was as large as said putting the figure at 8.5b against Naikunis 13.4 billion. The committee is expected to continue with its hearings tomorrow where transport minister Amos Kimunya will be questioned.

IS IT TIME UP FOR NAIKUNI?

2012-09-24T03:04:00.001-07:00

Is Titus Naikuni a man under siege? This is the question arising after seeing the Kenya Airways managing director lose touch with the Kenya Aviation and Allied Workers Union and recently the Kenya Airline Pilots Association. He further seems to have lost the confidence of shareholders after surprisingly having lost the race for Africa’s first dreamline to competitor Ethiopian Airlines as well as dismal performance in profitability. Titus Naikuni’s star started rising with his employment into the civil service as part of the World Bank sponsored Kenyan technocrats often referred to as the dream team who were professionals mostly from the private sector expected to inject new blood into the public service. Naikuni left the ministry of transport after serving as permanent secretary for 19 months back to the private sector where he served an extra 2 years at Magadi Soda before he took over at the helm of Kenya airways in 2003. This was after he was awarded the manager of the year in 2002. Since his entry into KQ in 2003 the company’s performance was exemplary with the airline’s profit margin at a record 9.7%. In 2005 the airline embarked on a fleet expansion programme. Since his entry into Kenya Airways, fleet has grown to 34 which include the acquisition of 5 embraer 170s and 4 embrear 190s from Brazil. However, Kenya Airways is now playing second fiddle to Ethiopian Airlines after losing out to its largest competitor on the acquisition of the Boeing 787 dreamliner with KQ still operating the boeing 777-200 ERs. KQ which had ordered 9 dreamliners with an option of 4 more has to wait much longer for its first delivery at a time Ethiopian Airlines will have acquired 5 jets and enjoying up to 20% in fuel cost saves even as KQ’s balance sheet becomes worrying. In the last financial results KQ’s profit dipped by 53% to Kshs.1.7 billion with fuel cost and staff cost blamed. Naikuni has further fallen out with the Kenya Allied and Aviation Workers Union and recently the Kenya Airline Pilots Association for the retrenchment of 578 workers with KALPA calling for his firing. In a paid advertisement, KALPA blamed KQs current woes to years of misadvised decision making adding that time had come for the chickens to come to roost. KALPA has also argued that retrenchment of staff due to increased costs was not clear-headed as operating cost had risen much faster. The management’s decision to hire foreign pilots has also not been received well with members of the public. Lastly, the government is now the largest shareholder at KQ following the recent Rights Issue with the state controlling 29.8 percent stake against KLM’s 26.3%. This is also expected to be reflected in the boardroom management. A Paris-based intelligence magazine, Indian Ocean Newsletter says the move by the Kenyan government to seek greater control was occasioned by the recent retrenchment at the airline, which had the blessing of KLM. For now it will be worth watching how Naikuni plays out his cards with so much pressure on his back.

Did Kenyan security Forces snooze on the Job in Garissa?

2012-07-02T05:03:00.002-07:00

Yesterday’s attack that left at least 17 dead and 50 injured in the border town of Garissa has raised more questions than answers as well as spread fear among Kenyans near the Somali border. This is as for now no one has been arrested with hopes of an arrest dwindling with the meltdown in time. However questions that arise from this attack include: Was this an ambush on the security forces in plain daylight? If not, did the locals collaborate and shield the Al Shabaab sympathizers. The last question that will dictate the way this debate progresses is: Were the attackers from within or without with the latter referring to Somalia. In the first part of the question what will puzzle many is how seven gun wielding Al Shabaab militants dressed in their attack regalia such as masked face and blue suits would have missed the view of the public. This brings us to the second part of the question: Did the locals collaborate and shield the Al Shabaab sympathizers? Garissa a town with over 60,000 inhabitants and the biggest town between Nairobi and Mogadishu is moderately populated with an easy sight over long distances given its topography. It would then be hard to penetrate this town with this kind of dressing as well as wielding the rifles. The plain would have further given the security forces an opportunity to have an idea of any intruders. This tackles the question of whether an ambush could have been carried in plain daylight. According to the Daily Nation newspaper some of those interviewed reported seeing youth celebrating following the attack, hold that thought! Do not forget that the attackers fired till they emptied their cartridge which would mean at least 30 shots were fired assuming one person emptied their magazine. The last and most important question is whether this was the work of a local or foreign terrorist. Having exhausted the first three questions, an aggression by local terrorist points an accusing finger on the national security and intelligence service NSIS. The fact that no one has been arrested in the area even after a grenade was left at the scene after it failed to explode, thus providing fingerprints or the identity of those behind the attacks, raises more eyebrows. Even in the lack of this evidence a door to door, in such a small town, was not a long shot for a country whose security was threatened and the reliability of the security organs in the line. Should the attackers have been foreign this poses an even better shot for the Kenya defense forces to apprehend them before making it to Somalia. As per what we know the Al Shabaab use 4X4 pick ups vans hence an escape and entry on the badly maintained road infrastructure is not a far thought. Another fact is that Garissa is just 150 kilometers from the Somali border hence easy to access and with no need to refuel. However 150 kilometers on such a terrain will not take you the normal two hours you use by bus, at least I suggest 4 hours on the minimum to cross the border and disappear. Just another 150 kilometers away by road to the north east is a Kenya air force base in the town of Wajir. From here the Kenya defense forces would have successfully launched a hunt using helicopters and trail the attackers as a ground operation continued. Did I forget to mention that Garissa is an important military base, from where ground forces have been deployed across the frontier into Somalia? With superiority in equipment we would have expected the Kenya army to reinforce the border area as well as track the militants by land. With the right and timely deployment it was almost not humanly probable to make it through to Somalia which is also largely held by the Kenya defense forces in towns neighboring Somalia. My assumption is that there would have been an ensuing gun fight as the militias resist arrest. The Kenya -Somalia border being just 400 kilometers from the Laikipia airbase would have meant any target headed to Somalia was within range of the supersonic F5E jets in use by the Kenya air force in minutes not counting the multiple Kenyan attack helicopters. REMEMBER: Within less than time taken to get to the border, which we approximated, was 4 hours, for an operative well vast with the area it was impossible to cross over to an area already occupied by the Kenyan troops. It is then arguably correct that Kenya’s defense forces and police had both the land and air capability to neutralize the fleeing militia. So where did the country’s security go wrong? Or were the security organs just sleeping?

KENYA TOURISM FEDERATION ON TRAVEL ADVISORY BY THE U.S GOVERNMENT

2012-06-26T05:54:00.000-07:00

KTF SECURITY STATEMENT On Saturday 23rd June, the US Embassy asked its staff to leave Mombasa or hold off their plans to travel there until 01st July citing intelligence reports of an imminent terror attack. And it came to pass that the next day at approximately 2200hrs an object (suspected to be a grenade) was lobbed in local bar in Mishomoroni which is a small suburb in the outskirts of mainland Mombasa. Three Kenyan citizens have since been reported dead and several others injured. While we appreciate that the primary responsibility of foreign missions is to their citizens, all nations need to appreciate that terrorism is not a Kenyan problem but a global one that has to be fought by all countries and peace in Somalia is key for global peace, not only for Kenya. Proactive use of intelligence information by any country will prevent senseless loss of human lives and deal a blow to the terrorist elements. This will make not only Kenya but the world at large a safer place. Our sincere condolences as tourism sector go to the families of the deceased and wish quick recovery to those who were injured. As a result of increased security in areas with tourist activity, we have been fortunate that no incidences have been reported in and around tourist areas. As citizens and investors in this country we appreciate the efforts that our government continues to deploy to keep us secure but need to be assured of our security as we go about our daily activities. The tourism sector further wishes to assure all esteemed visitors to Kenya that tourist class facilities continue to maintain a very high degree of vigilance in collaboration with government security agents. All intending visitors to Kenya are reminded to book their safaris only through reputable and licensed operators. Should you require more information please contact the KTF Safety and Communication Centre, which remains open 24hrs daily and will be updating the industry should there be issues of concern. Lucy Karume Chairperson The Kenya Tourism Federation(KTF) Safety and Communication Centre

KBC REPORT AS PRESENTED TO PARLIAMENT BY THE JOINT COMMITTEE ON ENERGY, COMMUNICATIONS AND INFORMATION AND HOUSE BROADCASTING COMMITTEE

2012-06-19T08:20:00.000-07:00

REPUBLIC OF KENYA KENYA NATIONAL ASSEMBLY TENTH PARLIAMENT – FOURTH SESSION - 2012 REPORT OF THE JOINT COMMITTEE ON ENERGY, COMMUNICATIONS AND INFORMATION AND HOUSE BROADCASTING COMMITTEE ON THE PUBLIC PETITION ON THE STATE OF AFFAIRS AT THE KENYA BROADCASTING CORPORATION ------------------------------------------------------------------------------------------- CLERK’S CHAMBERS, PARLIAMENT BUILDINGS, NAIROBI MAY, 2012 Table of Contents LIST OF ACRONYMS AND ABBREVIATIONS iii PREFACE v SUMMARY OBSERVATIONS, FINDINGS AND CONCLUSIONS vii SUMMARY RECOMMENDATIONS xi ACKNOWLEDGEMENTS xii CHAPTER ONE: INTRODUCTION AND BACKGROUND 1 1.0 INTRODUCTION 1 CHAPTER TWO: SUBMISSIONS BY STAKEHOLDERS 3 2.0 INTRODUCTION 3 2.1 MEETING WITH THE PETITIONERS (KBC STAFF) 3 2.2 MEETING WITH THE KBC BOARD OF DIRECTORS AND MANAGEMENT 15 2.3 EVIDENCE BY MINISTER FOR INFORMATION AND COMMUNICATIONS 22 2.4 EVIDENCE BY FORMER MANAGING DIRECTORS OF KBC 25 2.5 EVIDENCE BY THE MINISTER FOR FINANCE 31 2.6 MEETING WITH ENGINEER GICHINA KANYI 32 2.7 MEETING WITH THE PERSON ACCUSED OF SEXUAL HARASSMENT 34 2.8 MEETING WITH MR. PATRICK QUARCOO 35 2.9 ADDITIONAL EVIDENCE BY THE MANAGEMENT OF KBC 36 2.10 EVIDENCE FROM THE WITNESS OF SEXUAL HARASSMENT 37 2.11 MEETING WITH ENG. PHILLIP OKUNDI 38 2.12 MEETING WITH THE CHIEF OF THE RADIATION PROTECTION BOARD 39 2.13 WRAP UP MEETING WITH THE MINISTER FOR INFORMATION AND COMMUNICATIONS 40 2.14 FINAL SUBMISSION BY THE PETITIONERS 40 2.15 VISIT TO KBC OFFICES IN KISUMU 43 2.16 VISIT TO KBC OFFICES IN NAIROBI 45 2.17 VISIT TO KBC OFFICES IN NYERI 46 2.18 VISIT TO KBC OFFICES IN MOMBASA 47 CHAPTER THREE: COMMITTEE’S FINDINGS, OBSERVATIONS AND CONCLUSIONS 49 CHAPTER FOUR: RECOMMENDATIONS 58 ANNEXES……………………………………………………………………………………………………………… LIST OF ACRONYMS AND ABBREVIATIONS AMTS Assistant Manager Technical Services BBC British Broadcasting Corporation BSI Broadcast Solutions International Ltd CEO Chief Executive Officer CCK Communication Commission of Kenya COR Code of Regulations COTU Central Organization of Trade Unions CTO Chief Technical Officer EABC East African Broadcasting Corporation EACC Ethics and Anti-corruption Commission EMU Efficiency Monitoring Unit FKE Federation of Kenya Employers FM Frequency Mode HR Human Resource HRM Human Resource Manager ICT Information, Communication Technologies KACC Kenya Anti-Corruption Commission KBC Kenya Broadcasting Corporation KBS Kenya Broadcasting Services KIMC Kenya Institute of Mass Communication KNA Kenya National Assembly KRA Kenya Revenue Authority KU Kenyatta University LPO Local Purchase Orders MBA Masters of Business Administration MD Managing Director MoU Memorandum of Understanding MW Medium Wave PAYE Pay As You Earn PBU Parliamentary Broadcasting Unit PCA Pay Change Advice PCK Postal Corporation of Kenya PNU Party of National Unity PPS Presidential Press Service TARDA Tana and Athi River Development Corporation UoN University of Nairobi VoK Voice of Kenya PREFACE Mr. Speaker Sir, It is my honour and pleasure to present to this August House, the report of the Joint Committee on Energy, Information and Communications; and the House Broadcasting Committee on the petition by the Kenya Broadcasting Corporation (KBC) employees. Mr. Speaker Sir, On Thursday 1st of March 2012, the Hon. John Mbadi M.P tabled a petition signed by 248 employees of the Kenya Broadcasting Corporation proposing various reforms at the Corporation. The petitioners cited that:- 1. Whereas Article 34(4) of the Constitution provides that all State-owned media should be free to determine independently the editorial content of their broadcast or other communications, be impartial and afford fair opportunity for presentation of divergent views and dissenting opinion, the Kenya Broadcasting Corporation which was established by the Kenya Broadcasting Corporation Act, Cap.131 operates in an environment of interference, political manipulations and low employee’s terms of service and oppressive wages. 2. That the management of KBC has over the years failed to address the grievances of their staff and instead resorted to victimization whenever a member of staff raises a concern. 3. That the KBC has been mismanaged leading to brain drain, loss of revenue, and lethargy amongst members of staff. Mr. Speaker Sir, The petitioners’ prayer was that the Parliament of the Republic of Kenya:- i) Do investigate the Corporation with a view to establishing the factors that have led to the current state of affairs at the KBC; ii) Do investigate the concerns related to the welfare of staff of the Corporation with a view to addressing their grievances and offering a long-term solution; iii) Do review the Kenya Broadcasting Corporation Act, Cap.131, with a view to harmonizing the law with the Constitution and strengthening the competitiveness of KBC; Following the tabling of the petition and in line with the Standing Order No. 210 (1), the Speaker directed the Joint Committee on Energy, Communications and Technology; and the House Broadcasting Committee chaired by the Hon. James Rege, MP and the Hon. Nicolas Gumbo, MP respectively to investigate the matter and table the report in the House within 21 days. Ensuing from this ruling, the joint Committee held a meeting on 3rd March, 2012 to deliberate on its programme of activities. Committee composition The Joint Committee comprises the following Members: 1. The Hon. (Eng.) James Rege, M.P. - Co-Chairman 2. The Hon. (Eng.) Nicolas Gumbo, M.P - Co-Chairman 3. The Hon. Clement Wambugu. M.P 4. The Hon. Maina Kamau, M.P 5. The Hon. Emillio Kathuri, M.P 6. The Hon. Joshua Kutuny, M.P 7. The Hon. Charles Keter, M.P 8. The Hon. David Koech, M.P 9. The Hon. Cyprian Omollo, M.P 10. The Hon. Aden Duale, M.P 11. The Hon. Prof. Philip Kaloki, M.P 12. The Hon. Aden Keynan M.P 13. The Hon. Ekwee Ethuro, M.P 14. The Hon. Edwin O. Yinda, M.P 15. The Hon. Peter Kiilu, M.P 16. The Hon. Gedion Mbuvi, M.P 17. The Hon. Benjamin Jomo Washiali, M.P 18. The Hon. Evans Akula, M.P 19. The Hon. William Kabogo, M.P Committee sittings The joint Committee held a total of 31 sittings and received oral and written submissions from the following stakeholders:- i) The Minister for Information and Communications; ii) The Minister for Finance; iii) The Permanent Secretary, Information and Communication; iv) The Board of Directors and Management of KBC; v) The petitioners (KBC staff); vi) Former Managing Directors of KBC; vii) Victims of sexual harassment, a witness and the accused; viii) Eng. Phillip Okundi; ix) Mr. Patrick Quarcoo, the CEO of Radio Africa Ltd.; and x) Eng. Gichina Kanyi The joint Committee also visited KBC offices and stations in Kisumu, Nyeri, Nairobi and Mombasa. Due to the expansive mandate and the large number of witnesses, the Committee could not conclude the inquiry by the deadline and was granted a further extension of two weeks by the Speaker on 18th April 2012 to enable it finalise its work and table the report in the House. SUMMARY OBSERVATIONS, FINDINGS AND CONCLUSIONS Administrative issues i) The Committee notes that the recruitment and promotion procedures of staff at KBC are questionable. ii) The Committee observes that the qualifications of the Human Resource Manager (HRM) as advertised in the news papers on 8th April 2010 required the candidate to posses an undergraduate degree, a post graduate diploma in human resource management and a Masters in Business Administration. The Committee further observes that the qualifications of the Managing Director (MD) required lower qualifications than the HRM of only an undergraduate degree in social Sciences despite the MDs position being a superior position. The Committee therefore notes the anomaly and further that the advertisement for the position of MD seemed to be in favour a specific candidate. iii) The Committee notes that despite the critical role played by KBC as the National broadcaster, the Corporation’s employees are poorly remunerated. The appointment of unqualified Radio Programmes Manager i) The Committee notes that the appointment of Mr. Walter Mong’are as the Radio Programmes Manager of KBC was irregular. Whereas the job description of the radio programmes manager required the candidate to possess a degree in communications, the documents submitted indicate that Mr. Mong’are holds a Diploma in Graphics (desk top publishing) from Kul Graphics and is yet to complete his degree at Kenyatta University (KU) which he has been pursuing since 1996. ii) The Committee notes that the hiring of an unqualified manager has caused discontent among KBC staff and was one of the reasons for the strike. The plight of Artistes and casual staff of KBC i) The Committee notes that despite playing an important role at KBC, the artistes and casual staff have been neglected and are treated as second class employees notwithstanding the fact that a majority of them have superior academic qualifications than permanent employees of KBC. Financial issues i) The Committee notes that KBC is insolvent a fact which the Minister for Information and Communications and the Minister for Finance concurred with and that there is need for massive injection of funding to KBC to protect it from imminent collapse. ii) The Committee notes that revenue collected at KBC is not properly documented. iii) The Committee notes that KBC has suffered from lack of financial support from the Government considering the government usually requests for live coverage of its functions yet it did not pay for the same. The Japanese Loan i) The Committee observes that the balance of the Japanese loan obtained for the Radio MW modernization project in 1989 stood at KSh. 22 billion and has adversely affected the Corporations’ financial status. The Committee further observes that due to the inability of KBC to meet its loan repayment obligations, Treasury was re-paying the loan on its behalf but expected reimbursement from KBC with interest at market rates. ii) The Committee notes that the main cause of KBC’s financial problems is re-payment of this loan. According to the 2009 KBC accounts, the total gross income of KBC was Kshs. 1,405,644,645.06 against the expenditure of Kshs. 3,535,016,696.71 which comprised of financial charges of Kshs. 1,943,326,391.32 as the money paid to Treasury by KBC on account of the Japanese loan. As a result, KBC made a loss of Kshs. 2,129,372,051.65. This confirms that KBC is solvent save for the Japanese loan. iii) The Committee is agreeable to the proposal that the government should encourage its agencies to place a certain percentage of their advertisements with KBC in a similar way it has compelled other government agencies to use public facilities like conference centers. Protection of the workforce i) The Committee notes that to a certain extent, there has been political interference in the management of the Corporation. This can be deduced from the exit of several MD’s under unclear circumstances and from the cited cases of influence on the broadcast content. ii) The Committee notes that the KBC Act Cap 221 is outdated and should be reviewed to make it consistent with Article 34 (4) of the Constitution and to confer independence to the managers of the institution to shield them against political interference. Allegations on Flawed Procurement and Corruption i) Evidence submitted before the Committee by the management of KBC confirms that York investments Ltd., Grand photolab E.A Ltd. and Leon Insurance company pre-qualifed by KBC are indeed owned by the same individual. From the documents supplied by the Management of KBC, the Committee notes that the Grand Photolab and York Investments appears to have been involved in several tenders. ii) When the KBC management appeared before the Committee they disputed the above allegations and asserted that even though considerable business has been given to the three companies, at no point had the companies ever bid against each other on the same tender. iii) The Committee finds nothing unusual if companies owned by the same person have not competed on the same tender. iv) The Committee has established that a team from the Public Procurement and Oversight Authority is investigating claims of alleged malpractice in particular to establish if the procurement law has been followed.( annex 12) Conflict of Interest on part of Board Members i) The Committee notes that Broadcast Solutions International (BSI) traded with KBC in the year 2010 and 2011 and is a pre-qualified supplier for 2011-13 despite its director Mr. Stephen Areba being a Director of KBC. The Committee finds that the Chairman of the KBC Board and the MD deliberately misled the Committee with respect to the business relationship between KBC and BSI and that either the Chairman was being evasive in his evidence or he was truly not aware of the dealings at the corporation. Misappropriation of funds from the Parliamentary Broadcasting Services i) The Committee is dissatisfied with the response by the KBC management to counter allegations that a commission of Kshs. 200,000/- is paid to one of the senior managers at KBC. The Committee further notes that there is apparent discrepancy in these commission payments considering the Parliamentary Broadcasting Unit (PBU) staff disputed ever receiving any Commissions from the “pooled money” despite playing a crucial role in the “process”. Status of KBC land i) The Committee notes that KBC has 36 parcels of land scattered in different parts of the country with an estimated market value of Ksh. 2.8 billion. The Committee however notes that the management does not possess the title deeds to all these parcels of land. ii) The Committee further notes with concern that land had been grabbed at the Mombasa site and was the subject of a court case. SUMMARY RECOMMENDATIONS 1. That KBC should be restructured and reformed to a National Public Broadcaster fully funded by the Exchequer. The new structure of KBC should include among others, a commercial department, a technical department and an infrastructure department. 2. Considering the present state of affairs at KBC most of which have been caused by poor management and administration, the Board of Directors and the Management of KBC should take responsibility. 3. The joint Committee is concerned by the failure of the Minister for Information to implement an earlier recommendation made by the Departmental Committee on Energy, Information and Communications and adopted by the House that the KBC Board be re-constituted. The joint Committee recommends that the Minister for Information and Communications disbands and reconstitutes the Board of KBC, within thirty days. 4. All the senior managers and heads of department of KBC should be vetted by the newly constituted board to ascertain their suitability for the managerial positions. 5. The management should implement a comprehensive policy on recruitment and a scheme of service to guide employment, promotions, transfers and grading of staff. 6. KBC Board should hire a Human Resource firm to harmonize and rationalize the staff and management structure at KBC. Following this harmonization, the artistes and casual staff at KBC should be given priority during recruitment, considering their high qualifications and experience. 7. The Board should review KBC’s policy on award of commissions to its staff and ensure that the permanent and pensionable members of staff do not draw any commissions whether from sales or revenue collections. 8. The Board should conduct an audit of all KBC assets. Moreover, KBC should move with speed to obtain all the title deeds of its land with a view of safeguarding the same against land grabbers and unscrupulous individuals. 9. The Minister for Finance should take the necessary steps towards improving KBCs financial status including restructuring its balance sheet by converting KBC debt into equity. 10. The Government should increase its financial support to KBC to accelerate the process of restructuring and reforms and enable it effectively perform its role as a National public broadcaster. 11. The Government should as a matter of urgency negotiate with the Japanese government to write off the Japanese loan acquired for KBC in 1989 for the purchase of the Medium wave equipment which are obsolete. 12. The Minister for Information and Communications should review the KBC Act Cap 131 in order to re-align it with the Constitution in particular Article 34 (4), to ensure that the National public broadcaster is independent and free from political influence. ACKNOWLEDGEMENTS The Committee wishes to sincerely thank the Offices of the Speaker and the Clerk of the National Assembly for the necessary support and services extended to the Committee to execute its work. As Co-Chairpersons, we must thank Members of the Committee for their patience, sacrifice, and hard work despite their other commitments and tight schedules, in their endeavor to deliberate on this petition. We must also thank the staff of the National Assembly for their steadfast support to the Committee. Mr. Speaker, Sir, On behalf of the joint Committee, I now have the honour and pleasure to present the Report and Recommendations to the House. Thank You, Signed ……………………………………………………………………………………………. CO-CHAIRPERSON (HON. JAMES REGE, MP) Signed …………………………………………………………………………………………. CO-CHAIRPERSON (HON. NICOLAS GUMBO, MP) Date: ………………………………………………………………………………………..…….. The Report was countersigned by the following Members of the Committee:- 1. The Hon. (Eng.) James Rege, M.P. - Co. Chairman 2. The Hon. (Eng.) Nicolas Gumbo, M.P - Co.Chairman 3. The Hon. Clement Wambugu. M.P 4. The Hon. Maina Kamau, M.P 5. The Hon. Evans Akula, M.P 6. The Hon. Emillio Kathuri, M.P 7. The Hon. Joshua Kutuny, M.P 8. The Hon. Charles Keter, M.P 9. The Hon. David Koech, M.P 10. The Hon. Cyprian Omollo, M.P 11. The Hon. Aden Duale, M.P 12. The Hon. Prof. Philip Kaloki, M.P 13. The Hon. Aden Keynan M.P 14. The Hon. Ekwee Ethuro, M.P 15. The Hon. Edwin O. Yinda, M.P 16. The Hon. Peter Kiilu, M.P 17. The Hon. Benjamin Jomo Washali, M.P 18. The Hon. Gedion Mbuvi, M.P 19. The Hon. William Kabogo, MP CHAPTER ONE: INTRODUCTION AND BACKGROUND 1.0 INTRODUCTION 1.1 Public broadcasting service which includes among others radio, television and electronic media, exists in many countries. Public broadcasting is funded from diverse sources including the public, license fees, individual contributions and commercial fees. Historically in many countries, public broadcasting was the dominant form of broadcasting. However, private broadcasting now also exists in most countries including Kenya. 1.2 Transmission by Radio in Kenya started in 1927 through the East African Broadcasting Corporation (EABC) which relayed British Broadcasting Corporation (BBC) news to the colonies. The broadcast services targeted white settlers who monitored news from Britain and other parts of the world. In September 1931, an agreement was made between the Government and the Imperial and International Communication Ltd (cable and wireless Ltd.) to take over the responsibility of broadcasting for a term of 25 years. 1.3 First radio broadcasts targeting Africans began during the World War II to inform relatives of African soldiers of the happenings at the war front. The first broadcast service for Africans- African Broadcasting Services (ABS) - was created in 1953 and aired programmes in Swahili and other languages. The television service (TV) was introduced in Kenya in 1962. The Voice of Kenya (VOK) was nationalized in 1964 through an Act of Parliament. The name was changed to KBC in 1989. 1.4 KBC is established as a public broadcaster by an Act of Parliament Cap 221. The functions of KBC are among others, to provide independent and impartial broadcasting services of information, education and entertainment in English and Kiswahili or in any other languages the Corporation may decide. The aims of KBC are to inform, educate and entertain the public through radio and television services. The specific aims are to increase understanding of the government development policies and strategies and promote an effective approach to the use of radio and television as tools for National Development. 1.5 KBC currently has about eight hundred and eighty seven (887) permanent employees and about four hundred (400) artists and casuals’ employees. It operates a TV station and over eighteen (18) radio stations. The Managing Director (MD) oversees the day to day running of KBC with the direction of the Board of Directors which consists of a chairman appointed by the President, the MD, the Permanent Secretary for information and Communication, the Permanent secretary for Finance and other members with specialized qualifications appointed by the Minister. 1.6 KBC has suffered many challenges including administrative challenges, political interference, poor asset management, high debts, irregular recruitment and promotions, poor working conditions and low wages which have led to a workforce that is dissatisfied. Owing to this dissatisfaction, for the first time in the history of the country, KBC employees went on strike to voice their grievances with a view of getting long term solutions. 1.7 On Thursday 1st of March 2012, two hundred and forty eight (248) KBC employees presented a petition to Parliament through the Hon. John Mbadi M.P citing interference and political influence at KBC; poor employee terms of service; low wages; and an oppressive work environment. The petitioners stated that KBC has been mismanaged leading to brain drain, loss of revenue and lethargy amongst members of staff. They prayed that Parliament investigates the concerns raised and establishes the factors that have led to the current state of affairs at KBC with a view of offering long-term solutions. The petitioners also prayed that Parliament reviews the KBC Act Cap.131 with a view of harmonizing it with the Constitution and strengthening the competitiveness of KBC. 1.8 Following the Speaker’s ruling on the petition, the joint Committee held sittings with the stakeholders in order to unearth the reasons behind KBC’s failures and provide long term solutions. From the evidence gathered, the joint Committee concludes that the corporation lacks both policy and legal framework and must undergo major reforms to transform it into a functioning National public broadcaster that serves the aspirations of all Kenyans as envisaged by the Constitution. CHAPTER TWO: SUBMISSIONS BY STAKEHOLDERS 2.0 INTRODUCTION The Committee received oral and written submissions as is presented here below. 2.1 MEETING WITH THE PETITIONERS (KBC STAFF) Appearing before the joint Committee on March 7th, 2012, the petitioners raised the following allegations and submitted written memoranda. 2.1.1 Administrative Issues (a) Irregular recruitment, appointments and promotions of staff at KBC They raised the following issues with regard to employment at KBC:- i) That the recruitment and promotion process at KBC was skewed due to lack of a proper scheme of service. ii) Recruitments, appointments and promotions of staff at KBC do not follow the due process. There were serious allegations of favouritism and granting of sexual favours for employment and promotions. iii) The petitioners cited a specific case which occurred in November 2010 whereby all the employees were promoted to higher grades though their salaries were not increased in line with their new grades. Notwithstanding this mass upgrade, in August 2011, the Principal internal auditor, finance manager and the Assistant Editor-in-Chief were promoted one grade up (SS BE3 to SS BE2) under unclear circumstances. They also alleged that the current administration manager who previously served as the Assistant Human Resource (HR) manager (grade SS BA 1) was also promoted to Administration Manager (SS BE3) before the mass upgrade under unclear circumstances since the post was never advertised nor any candidates interviewed. He was later upgraded to grade SS BE2 after the mass promotion. iv) The Committee heard that some vacancy advertisements were tailor made to suit specific individuals. For instance, on 8th April 2010, an advertisement was placed in the standard newspaper for the position of the MD and another one in May for the position of the Human Resource Manager (HRM). The qualifications for the HRM required the candidate to possess a post graduate diploma in human resource management and a Masters in Business Administration (MBA) while the MD was required to posses only a degree in Social Sciences . The petitioners argued that the qualifications for MD were set with a specific individual in mind. v) The petitioners stated that in July 2009, the management approved the Code of Regulations (COR) which provided for, among others, the payment of commuter allowance to all staff at the rate of 15% of their basic salary. This was implemented two years later in July 2011. However, before the implementation of this allowance for all staff, the managers were already drawing transport allowance at the rate of Ksh. 10,000.00 per month. The petitioners alleged that the provision in the COR that ‘those already drawing transport allowances would continue earning it at the rate of 15% of their basic salary or Kshs. 10,000.00 which ever was higher’ was in favour of the managers and was done with full knowledge of the fact that 15% of the basic salary for managers was higher than the Ksh.10, 000 they were already earning. (b) The appointment of an unqualified Radio Programmes Manager i) The petitioners alleged that the Radio Programmes Manager Mr. Walter Mong’are was irregularly recruited in April 2010 despite his lack of the relevant qualifications and that his subordinates had better qualifications than him. They referred to his Curriculum Vitae which showed that Mr. Mong’are holds a Diploma in Graphics (desk top publishing) from Kul Graphics Institute and is yet to complete his degree at Kenyatta University (KU) which he has been pursuing since 1996. The petitioners stated that as a result of his inadequate qualifications, Mr. Mong’are is not fit to provide leadership and manage the department. (c) The Plight of Artistes and Casual Staff i) The petitioners defined the term “artistes” as provided for in the KBC Code of Regulations of 2009, as a public performer or entertainer whose services are employed by the Corporation. The COR further states that the terms of the artistes shall be spelt out in the artistes’ policy. The terms of engagement for the casual employees on the other hand stated that the casual workers were not to be engaged for a continuous period exceeding one month and were not entitled to any leave, gratuity, medical cover and other benefits. ii) The petitioners stated that the artistes were discriminated against yet KBC as a state corporation was expected to treat all employees equally. The issues they raised with regard to KBC artistes include:-  Employment The petitioners alleged that:- i) Most of the artistes had served the corporation as temporary employees for more than the six month stipulated period with some even working for up to seven years. This, in their opinion contravenes the Constitution and the labour laws. ii) The artistes were grossly underpaid despite being highly qualified. Moreover, the pay day was inconsistent and varied from either the 5th, 10th or 18th depending on the signatories’ preference. They further alleged that transition to permanent employment was not carried out in a transparent manner but was through nepotism and sexual favors. iii) There was lack of a standard policy on artistes. For instance, in some departments, artistes were assigned contracts and appraised but this was not the case in all departments. Further, some artistes such as those in the IT and marketing departments earned KSh. 30,000 and were entitled to medical and house allowances yet others with the same credentials earned as little as KSh. 17,000.  Discrimination i) The petitioners alleged that the artistes were often overworked by assigning them mostly night shift and weekend duties despite having permanent employees who were deemed to be more qualified. However, they were discriminated against in assignments that generate allowances and commissions. Such assignments were always assigned to permanent employees with the excuse that artistes were not permanently employed and were not entitled to risk allowance. This discrimination extends to training opportunities and award of scholarships.  Inhumane working conditions i) The petitioners alleged that the artistes were not entitled to either annual leave or off days thus subjecting them to long working hours without any break or compensation. They further alleged that female artistes were not entitled to maternity leave and were only given two weeks off on humanitarian grounds. They felt that this was discrimination on gender basis and an outright infringement of basic human rights and the labour laws. ii) They further stated that the artistes did not have medical benefits and risk allowance and presented cases where some had incurred injuries in their line of duty but were abandoned at the accident sites or hospital to cater for the ensuing expenses despite their low wages. The petitioners recounted specific cases of a Mr. Tony Juma, a camera man who was involved in the Eldoret air crash in May 2009; Ms. Rebecca Masinde, an editor who was stabbed on her way home from work in 2011; and Maryanne Wanjiku a producer who was involved in a car accident on her way from work. Artistes working on night shift at the station or at other locations were denied transport and meals.  Corruption i) It was alleged that KBC deducts Pay As You Earn (PAYE) from the artistes but does not remit the same to Kenya Revenue Authority (KRA). The petitioners based this allegation on the fact that the artistes are asked to apply for a new KRA pin number once they get permanently employed. (d) Staff Victimization The petitioners claimed that the deputy procurement manager was transferred from Nairobi to Mombasa under unclear circumstances for being a whistle blower. They claimed his transfer was because he was perceived to be a stumbling block to corruption and procurement irregularities at the KBC headquarters.  The case of Elyna Wanyika Sifuna i) Ms Elyna Sifuna who had been taken to court on allegations of sending abusive text messages to former MD David Waweru and the current MD Mr. Waithaka Waihenya, was cleared of these allegations after the court found no evidence indicating she was the sender of the text messages. She later filed a case with the industrial court and was awarded damages and an order made to the corporation to reinstate her. The corporation has however refused to lift her suspension. According to the petitioners, the company secretary belatedly filed an appeal against the ruling. ii) Further, it was stated that the corporation enlisted the legal services of Kinyua Muriithi and Company Advocates whose legal fee is catered for by the corporation yet Ms. Sifuna had sued Mr. Waihenya for defamation in his personal capacity and not as the corporations MD.  The case of Sylvester Legewa Mr. Sylvester Legewa, who had served for a long period of time as a contracted ICT officer, was unprocedurally sacked from KBC after the management failed to sign the document authorizing his pay. Mr. Legewa was neither given a termination letter nor notice. (e) Sexual Harassment The Committee met with one of the alleged victims of sexual harassment who informed them that the other victims were reluctant to appear before the Committee for fear of victimization. The Committee heard that:- i) She joined KBC in 2007 as an intern just before graduating from university. ii) She later worked for one and a half years as a casual employee without pay. iii) She transferred from reporting news on T.V to a producer at Metro FM where she worked under the accused. The accused sent her several suggestive messages and at one time offered to take her on an “exotic” trip but she declined. He also brought her gifts on his return from one of his trips which she accepted. iv) The accused however continually frustrated her because of her unwillingness to grant him sexual favors by refusing to grant her leave or sick offs (she got her first leave after 4 years); burdening her with excess work; and addressing her in vulgar language. v) She complained to her superior who had earlier warned her to be wary of the accused- she however never pursued the matter. vi) The victim felt that she was discriminated against considering her salary was only Ksh. 27,000 while her colleagues at Venus FM were paid a salary of Ksh. 70, 000. The victim had strong suspicions that this discrepancy was as a result of her unwillingness to yield in to the demands of the accused, though she did not rule out any other reasons. vii) She then stated that the studios at KBC were not safe for female employees particularly at night considering the security personnel were located far from the studios. 2.1.2 Allegations of flawed procurement processes and malpractices The petitioners raised allegations with regard to KBC’s procurement process. The Board of Management was accused of corruption, procurement irregularities and wastage of public funds as detailed here below. (a) Irregular engagement of service providers i) The petitioners argued that the approval of a request by the Kenya Auto Electrical Ltd to the Procurement Manager for extension of the closing date for tenders in its letter dated 5th March 2012 (REF: KAEL/KBC/12/029) when KBC staff were on strike was irregular and should be probed further. The company is however not prequalified to supply equipment or any material to KBC. ii) They stated that the MD had signed a contract with One Way Cleaning Services Ltd which was not pre-qualified for offering cleaning services to KBC. The petitioners indicated that the details of the contract were scanty but requested the Committee to further follow up on the transactions through payments to the company vide Cheque No. 008744. They went further to request that the supplies and marketing inspector, a Mr. Samson Ondieki ought to be questioned with regard to these suspect transactions. iii) They further alleged that tenders were being awarded at inflated costs for some services that could be undertaken internally by the employees. For instance, Turnkey services had been paid huge amounts of money for a TV programme that could have been produced by highly qualified personnel at KBC. iv) Despite KBC undertaking tenders for supply and installation, KBC Staff were sometimes directed to implement the tasks on behalf of the bidder despite the tender documents indicating clearly what was expected of the bidder. v) The petitioners alleged that KBC has engaged law firms without tendering yet it has a fully fledged legal department. (b) Tenders awarded The petitioners alleged that a majority of the lucrative Tenders at KBC are awarded in favour of five companies associated to one individual. The tenders awarded to these companies according to the petitioners include:- i. A tender for TV virtual set awarded to Grand photolab which the petitioners alleged had been varied from KSh 16m to about KSh. 50m without competitive bidding. ii. A tender for FM Transmitters (Kuria, Webuye, Kisumu and Kisii) which was separated into two tenders, one for transmitters and one for antennas and awarded to Grand Photolab and York investments for about KShs. 50m. iii. FM Transmitters for Vernacular stations (Luo, Luhya, Kisii, Kalenjin etc.) were awarded to the same two firms without competitive tendering. iv. A tender for analogue TV Transmitters was awarded to the same firms at a cost of about KSh.100m. v. A tender for digital TV transmitters was awarded to Central Works Company at a cost of about KSh. 280m. A down payment of KShs. 88m was paid out to the company during the KBC staff strike. The petitioners alleged that the evaluation for most of the above tenders was done with the assistance of two University of Nairobi (UoN) lecturers, Prof M.K. Wamang’oli and Dr. Elijah Mwangi, yet KBC has the capacity to carry out the evaluation. They further alleged that the team was appointed directly and unprocedurally by the tender committee. According to the petitioners, the source of specifications and evaluation criteria are suspicious in view of the above. (c) Inspection and Acceptance Committee i) The petitioners stated that they found it peculiar that, a Mr. Fred Akoko, was not involved in the Inspection and Acceptance of equipments from suppliers despite a memo from the CEO appointing him to the membership of the Inspection and Acceptance Committee dated 28th July, 2011 (REF: KBC/MD/12/6/C). (d) Conflict of Interest on the part of Board Members i) The petitioners claimed that Broadcast Solutions International Limited (BSI), a company owned by a board member, Mr. Steve Areba, was pre-qualified to supply equipment for the years 2011-2013. They stated that BSI was hosting Pan Africa Media Network, the second licensed multiplex company at KBCs Gatimu site in Limuru despite the company expressing interest in being hosted by KBC at the Limuru Transmission. The petitioners alleged the existence of a letter with regard to this request. ii) The petitioners alleged that Hope FM withdrew their transmission equipment from KBC Limuru Transmitter station to the BSI site in Gatimu between 4th and 6th August 2011 as a result of verbal instructions from the Assistant Manager Technical Services (AMTS) Mr. Tom Buluku to the Engineer-In-Charge Limuru Transmitter. iii) It was alleged that another Board member, Mr. Ben Gituku also sits on the board of the Radio Africa Group which was a clear case of conflict of interest. The petitioners insinuated that this could have had a bearing on the controversial deal between KBC and Radio Africa over the exclusive FIFA 2010 World Cup rights that was currently a court case (former MD David Waweru and former Company Secretary Hezekiah Oira were sacked from the corporation and arraigned in court over the matter). (e) Commission payment i) The petitioners claimed that commission payment from the proceeds of live broadcast of Parliamentary proceedings was irregularly done contrary to claims by the acting finance manager that the Corporation has been paying the Parliamentary Broadcasting Unit (PBU) staff monthly allowances. ii) The petitioners requested the Committee to investigate the matter and establish the beneficiaries of these allowances since 2008. They further made a plea to the Committee to compel KBC to immediately pay all the PBU staff the requisite allowances backdated to the commencement of the parliamentary live proceedings in 2008. (f) Suspicious increase in wealth of employees i) The petitioners alleged that the social status of some of the managers had radically changed in the short period they had been in the Department. They requested the Committee to probe the source of their wealth and specifically how the had acquired vehicles and property. They cautioned that the excuse of loans could be used to camouflage corrupt deals amongst some managers. The petitioners were concerned that the Minister for Information and Communications had not invited the Efficiency Monitoring Unit (EMU) and/or Ethics and Anti-corruption Commission (EACC) to investigate these claims which they had presented to him on 8th December 2011 in a memorandum signed by 315 staff. They requested the Committee to recommend the suspension of any corrupt manager and freeze their bank accounts until the investigations were completed. 2.1.3 Poor organizational Structure and financial management The Committee heard that; i) KBC is heavily indebted; ii) There is a deliberate attempt by the Ministry to cause the collapse of KBC since the PS openly favours ICT departments. iii) Postal Corporation of Kenya (PCK) and the Kenya Institute of Mass Communication (KIMC) were some of the organizations being marginalized by the Ministry. (a) Mismanagement i) The petitioners alleged that there was mismanagement at the corporation through creation of units that added no value to the core business of KBC and were headed by personnel earning huge salaries yet their roles were not clearly defined. For instance, in the marketing and radio department. ii) They further pointed out the merger of the ICT and technical departments which in their opinion was an amorphous unit that was headed by an ICT person with no requisite background in broadcast engineering. iii) The petitioners pointed out that the workshop at KBC that was intended for preventive maintenance, repair and testing of KBC transmission and production equipment and which was to be equipped with standard repair tools, repair kits and instruments to undertake the said works under international standards had been abandoned and neglected and only carried out piecemeal works. iv) They were dismayed at the closure of Metro FM which at the time of closure had the highest listenership of all the KBC radio stations. (b) The ICT and Technical Department i) Majority of the ICT officers had no job descriptions. This had left them vulnerable to harassment and malpractice especially during appraisal target setting. The petitioners alleged that only selected individuals have job descriptions. ii) There is a glaring lack of ICT and technical maintenance tools in key operation areas coupled with lack of well equipped workshops for equipment testing and maintenance. The technical challenges include:-  Lack of sufficient hardware such as computer, printers and scanners etc;  Inadequate workstations for all staff members;  Lack of licensed Software; and  Lack of proper server rooms with efficient backups 2.1.4 Changing Technologies The petitioners alleged that KBC as the implementing agency of the Task force on digital migration had not provided leadership nor created capacity for a comprehensive migration plan. They accused the corporation of abdicating its responsibility of migration to foreign companies in total disregard of its national mandate. They cited some glaring anomalies that created confusion as:- i) Lack of direction and impetus in the formation of a Signal distribution company. ii) Purchase of analogue TV transmitters despite the stipulated analogue switch off date slated for 30th of June 2012. The corporation also awarded tenders to a local company to supply digital TV transmitters that were untested and had no local or international reference for proof of quality. 2.1.5 Some other general issues raised by the petitioners include:- i) The petitioners accused the PS and Minister of micro managing KBC and supporting the recruitment of persons who lacked in suitable qualifications including both education and experience for the positions assigned to them. ii) KBC had more managers than non-manager employees and that the intention was to suppress the employees from joining the Union. iii) Most staff at KBC had stagnated in one position considering promotion was used as a tool of reward for sycophancy by the management. iv) The management was intolerant to staff which had consequently led to brain drain at KBC. 2.1.6 The petitioners drew the following conclusions and recommendations:- i) That there are gross malpractices at KBC which call for immediate action. There is also an urgent need to prevent any obstacles to investigation including but not limited to the stepping aside of officers implicated in the dubious deals and suspension of all contracts until procurement processes are investigated. ii) There should be strict adherence to the KBC recruitment policy and establishment of procedures that take into consideration gender mainstreaming. iii) There is need for appointment of radio and television experts to the KBC Board of Directors to effectively assess candidates for radio and television jobs. The staff alleged that the Radio department had fallen victim to incompetent managers because of failure to have board members who are well versed on broadcasting matters. iv) KBC should update its scheme of service in order to target the right candidates with specific qualifications. v) The artistes and casual employees should be employed on permanent and pensionable terms to fill the current vacancies based on their credentials, years of service and the roles played within the corporation. The artistes and casual staff should be better paid and be entitled to medical and house allowances. vi) The petitioners called for investigations to establish the justification for hiring a private company - Tysons Limited and Interlink – to manage the KBC Housing scheme yet KBC was able to manage the scheme by recovering the rent from the staff through the pay roll. 2.2 MEETING WITH THE KBC BOARD OF DIRECTORS AND MANAGEMENT The joint Committee met with the KBC Board of directors and management on Thursday March 8, 2012. During the meeting, they responded to the following issues that had been earlier raised by the petitioners:- 2.2.1 REASONS THAT LED TO THE STRIKE (i) The management admitted that they were aware that the KBC staff faced several problems including low salaries, stagnation and poor working conditions. They believed that these were the reasons that led to the strike considering they had plagued the organization for quite some time. (ii) They however stated that though they were greatly concerned with these challenges, the corporation was financially strained and was therefore not in a position to pay its staff well, purchase equipments and cater for other operational expenses. The management strongly believed that financial challenges were the main cause of these problems and an increase in financial allocations would greatly contribute to addressing these problems. (iii) The management further stated that they appreciated the staff’s concerns since they were genuine but they were not agreeable to the channel the staff used to raise their concerns. 2.2.2 ADMINISTRATIVE ISSUES a) Promotions and appointments of staff With respect to KBC’s recruitment and promotion policy, the Committee was informed that:- i) In 2007, KBC commissioned the Federation of Kenya Employers (FKE) to carry out an organization review and job evaluation exercise whose findings are contained in a report dated November, 2007 which recommended amongst others, the re-alignment of the staff complement of KBC. ii) The staff misunderstood the recommendations contained in the report to mean that their remuneration would be increased. They however stated that the board was working on a system to improve the salaries of the staff. iii) There has never been mass promotion or recruitment of staff as alluded to by the petitioners. iv) The management appreciated that KBC has a large workforce and there was a need for staff harmonization. v) With respect to the specific claims by Mr. Milton Nyakundi, the MD stated that Mr. Nyakundi had personally submitted his resignation letter to him. The MD informed the Committee that he tried to persuade Mr. Nyakundi against resigning but he was adamant on his decision and the MD therefore wished him well. b) The appointment of Mr. Walter Mong’are as Radio Programmes Manager. The management informed the Committee that the Radio Programmes Manager Mr. Walter Mong’are was on a three (3) year contract and not on permanent and pensionable terms as alleged. Mr. Mong’are was employed on a talent basis based on a decision by the Board to source and employ a person based on his/her talent in order to improve the radio section. The management concurred that Mr. Mong’are only held a Diploma in printing but they were of the opinion that he was qualified considering he had seven (7) years experience. They further stated that since his appointment, the radio department had improved. The Management tabled the job description of the Radio Programmes manager. c) Specific action undertaken by the Management to improve staff welfare The KBC Board and management stated that they had undertaken several steps to improve the welfare of its staff. Most notable of which were:- (i) Introducing staff commuter allowance in 2010. (ii) Increasing staff remuneration by 21% through a 9% pay raise in February 2012 and a further increment of 12% which was backdated to July 2011. (iii) Commencing the process of procuring medical cover for the employees. (iv) A car loan scheme was introduced and efforts are underway to introduce a mortgage scheme. (v) While appreciating the deplorable conditions of studios and offices at KBC, the management assured the Committee that efforts were underway to refurbish the newsrooms. d) The plight of Artistes and Casual staff. The Committee heard that the Corporation hires artistes as provided for in the KBC Act Cap 221. The management admitted that they were dependent on the artistes who were highly qualified and even more skilled than the permanent staff. The management drafted a policy on artistes and casual staff in 2011 and thereafter issued a circular for recruitment of casual staff who had served for a long period of time. They were aware that some of the casual staff had served for over eight (8) years and they had therefore started the process of filing vacant positions by hiring causal employees. The management informed the Committee that on 7th March 2012, they had commenced the process of issuing all the casuals with a three (3) month contract as an interim measure before regularizing the anomaly. They further stated that they had commissioned an audit of all KBC staff in order to establish the number of staff and the optimum number to be maintained. The MD assured the Committee that KBC will give priority to the recruitment of casual employees depending on availability of funds. He also gave an assurance that he would investigate the claims leveled by the petitioners that the management compelled the casual staff to acquire new PIN numbers during extension of their contracts in an effort to avoid paying tax and employment law. The MD made a commitment to further investigate the claims made by the petitioners that the employees injured in the line of duty were abandoned and in particular the case of the cameraman who was left unattended by a manager after the plane crash. e) Allegations of sexual harassment The Management informed the Committee that sexual harassment was listed as an offence under the KBC Code of Regulation. They however claimed that they had not received any official reports of sexual harassment but gave an undertaking to take serious action against any perpetrators. 2.2.3 PROCUREMENT ISSUES (a) The 2010 FIFA World Cup rights saga The Chairman informed the Committee that:- (i) KBC was embroiled in a court case with Radio Africa Ltd. over the 2010 FIFA World Cup rights. (ii) The Board was aware of the allegation that one of the KBC directors, Mr. Ben Gituku, also sits on the Board of Radio Africa Group. Following these allegations, the Board held a meeting to establish the truth and confirmed the allegations were not true. (b) Conflict of interests by some Director’s of KBC by transacting business with KBC i) The Chairman of the Board of KBC informed the Committee that to his knowledge, none of the Directors currently transacted any business with KBC. He stated that at one time, one of the Directors Mr. Stephen Areba had requested to transact business with KBC but his request had been turned down. He however acknowledged being aware that Mr. Areba had previously through his company, Broadcast Solutions International Ltd (BSI) held a contract with KBC but this was no longer the case. ii) The MD however gave a different account by confirming that indeed there was an existing contract between KBC and BSL Ltd for co-sighting but the contract had been drafted long before Mr. Areba had joined the Board. iii) The Committee noted the discrepancy between the evidence of the MD and Chairman of the Board and requested to be availed with additional information . (c) Tendering and Pre-Qualification of Companies by KBC i) The Committee heard that none of the companies pre-qualified by KBC were owned by the same individual or had competed against each other on the same tender. The management however stated that they were aware of a supplier whose three (3) companies were awarded tenders but they were categorical that these companies did not compete on the same tender. ii) They stated that the said supplier had won two (2) tenders through his three companies, Grand Photolab E.A Ltd; York Investments Ltd; and Leon Insurance Company. They further explained that York Investments Ltd had won two (2) tenders; Grand Photolab E.A Ltd had won one (1) and Leon Insurance Company had won two (2) over a period of two (2) years. iii) With respect to Kenya Auto Electrical, the management clarified that the company had not been approved as a supplier considering the tender in question was still in process. They denied the allegation that there were alterations of tender documents in favor of Kenya Auto Electrical. (d) Misappropriation of funds from the Parliamentary Broadcasting Services The Committee heard that KBC receives Kshs. 15 million every month from the Kenya National Assembly (KNA) for live coverage of Parliamentary proceedings. The management stated that the funds were used to purchase new cameras. With respect to the allegation that a commission of Kshs. 200,000/- is paid to one of the senior managers at KBC, the management responded by stating that:- i) KBC had a policy on payment of commissions for revenue collection as per the set targets. Considering therefore that Parliament was one of the sources of revenue, a commission was paid from these proceeds to the KBC employee in charge of the Parliamentary account. ii) The commission was pooled and distributed to all the staff involved with the payment rates depending on the employees’ job grade. The management was adamant that it was impossible for only one individual to receive the funds. The Committee noted the contradiction with regard to the payment of these commissions and requested the MD to avail a report indicating how KBC utilizes funds from the KNA for the live Parliamentary broadcasts . (e) Drastic change in “social status” of allegedly corrupt KBC staff With regard to this issue, the MD undertook to avail to the Committee copies of declaration of income, assets and liabilities for the last three years of some of the managers who had been mentioned as individuals whose social status had drastically changed within a short period of time . 2.2.4 ORGANIZATIONAL ISSUES (a) The closure of Metro FM and establishment of Venus FM On this particular concern, the Committee was informed that:- i) Metro FM was one of KBC’s commercial radio stations with the specialization of reggae music but its revenues had begun dropping despite the fact that it had a huge listenership. The management explained that the reduction in revenues was as a result of the withdrawal of advertisers because they didn’t want to be associated with the Rastafarian lifestyle. ii) Following this situation, the board considered the proposal of changing and re-engineering the station. The management’s proposal of establishing a women only station was approved by the board and therefore, Venus FM was launched. iii) Venus FM uses the same frequency previously used by Metro FM and though the station was already on-air, it had not been officially launched. iv) The head of the station had been appointed on an acting capacity. The management stated that they had re-assigned some members of staff of Metro FM to other departments and that nobody was sacked or victimized. v) The current revenues from Venus FM were KShs. 4 million per month but this amount was projected to rise to KShs 15 million per month as was the case with Radio Taifa. vi) The management denied the allegation that the marketing department deliberately led to the closure of Metro FM by failing to raise revenue. (b) Illegal use of KBC frequencies by other stations The Committee heard that there was an agreement with Ghetto Radio for usage of the KBC frequency. Under this agreement, KBC was to receive some payments but the agreement has since become void as the station is currently leasing the frequency from KBC at Kshs. 0.5 million per month. The Management denied knowledge of an agreement between Hope FM and KBC for the former to utilize KBC’s frequencies. (c) Illegal disposal of KBC land The management was not aware of any KBC land disposal since 2005. 2.2.5 TECHNICAL ISSUES The Committee heard that: i) KBC has suffered from lack of financial support from the Government and that the government frequently requested for live coverage of its functions without pay for the same or even air government advertisements with KBC. ii) The Management of KBC was of the view that since KBC performs the role of a public broadcaster, which is not profitable, the government should issue a circular compelling all government agencies, to place 20% of their advisements with KBC in a similar way the government has compelled government agencies to use public facilities like conference centers. iii) KBC has not yet concluded the merger between the ICT and the technical services and that the same was still being deliberated upon. The rationale behind the plan was the conflict between the ICT department and the technical Services department and there was therefore a need to minimize this conflict. The issues are still being handled by the Board. 2.3 EVIDENCE BY MINISTER FOR INFORMATION AND COMMUNICATIONS The Minister for Information and Communications the Hon. Samuel Poghishio, EGH, M.P appeared before the Committee on Tuesday March 13th 2012. The Minister was accompanied by the PS in the Ministry, Dr. Bitange Ndemo, CBS. The Minister informed the Committee that when he took office as Minister, he realized that KBC was facing several challenges and he has since assuming office, been working towards addressing these challenges. i) According to the Minister, it was unclear whether the staff and artistes withdrew their services or they had gone on strike. In his opinion, the artistes had left KBC because they didn’t want to work there anymore. He was however of the opinion that the strike was caused by a failure by the management to pay the staff an allowance. ii) The Minister stated that five (5) years ago he wrote a cabinet memo requesting the Treasury to fund KBC. The cabinet memo was however not approved. He explained that a Cabinet memo cannot be discussed at the cabinet if it has any financial implications until the Minister for Finance counter signs it. iii) The Minister acknowledged that indeed KBC had a huge debt which emanated from a loan acquired to purchase medium wave equipment in 1989. He expressed his frustration that this equipment consumed high power costs leading to regular disconnections by KPLC due to failure by KBC to pay for the high power bills. He however reiterated that power expenditure had significantly dropped due to the piecemeal migration to FM frequency and it was projected to eventually drop from KSh. 30 Million to KSh. 3 million. iv) With regard to digital migration, he informed the Committee that Signate was currently managing the analogue to digital migration process and that Nairobi, Naivasha and Eastern were already complete. It was further expected that Kisumu and Nakuru would be complete by the following month. v) It was unfortunate that the labour and salary issues had not been well addressed. He stated that the corporation’s employees continued to earn the same salaries since VOK changed to KBC and at some point earned even less than public service staff rates. vi) In his opinion, KBC has a large number of employees as compared to those in the private media houses. Despite an earlier retrenchment exercise, approximately 1400 employees still remained in the employment of the corporation consuming a huge wage bill. This informed the Board’s decision to pay a few management staff contrary to the agreement that the mass promotion in 2011 should not have any financial implication. The selective payment resulted to a complaint by the staff and was the main trigger of the strike. This has since been resolved through the back to work formula and the PS is following up on the same with Treasury. vii) The Minister assured the Committee that he has called for a thorough audit process to investigate alleged corruption in the procurement process at KBC. The Minister undertook to further investigate allegations of conflict of interest and corruption at the board level and deal with it accordingly. viii) The Minister concurred that it was through the strike that the Ministry came to the realization that KBC was being run by the artistes. He was agreeable to the petitioners’ claim that it was illegal for the artistes to work for a long period of time on temporary contracts. He however stated that the process to correct this illegality had begun through permanent employment of artistes who were highly qualified and thus very resourceful to KBC. ix) The Minister stated that the COR which was accepted by the board had financial implications of about Ksh. 490 million. He recommended increased funding from Treasury and made a plea to the Committee to offer their support in lobbying for increased funding to enable KBC meet its broadcast obligations. x) The Minister was categorical that the strike was illegal and that the government had permitted the staff to join the union which they had disowned. This forced the Central Organization of Trade Unions (COTU) to withdraw their services and classify the strike as illegal although the union fee had already been deducted. xi) The Minister made the commitment to restructure the Corporation’s board in order to recruit new board members with relevant qualifications and experience. The Committee directed the Minister to present to Parliament the list of the reconstituted board and their CVs. xii) The Minister and the PS stated they had no knowledge of the alleged sexual harassment at KBC. He found it unfortunate that these claims of sexual harassment were never raised during his meeting with the KBC Staff. He recommended that after investigations the offenders should be sacked and punished. xiii) The PS denied any relations to Mr. Walter Mong’are and involvement in his recruitment as the Radio Programmes Manager. As far as the PS was aware, Mr. Nyambane was hired after the former MD had reviewed the ratings of KBC and recommended hiring of a competitive presenter such as was the case at Classic FM. Following the meeting, the Committee noted that:- i) Some of the artistes were more qualified than permanent KBC employees who were not technologically compliant and there was therefore need to recruit the artisans as permanent staff. ii) The purchase of the obsolete medium wave technology was irregular and must be legally addressed. It was therefore recommended that in future, any modernization equipment purchased by KBC should be internationally accredited. iii) Treasury should allocate a certain amount of money to KBC to enable it run as a National public broadcaster. iv) KBC should be renamed and an optimum number of professional staff should be established. 2.4 EVIDENCE BY FORMER MANAGING DIRECTORS OF KBC Three former MDs of KBC appeared separately before the joint Committee on Tuesday March 20, 2012. 2.4.1 Mr. Claxton Munywoki Mr. Munywoki informed the Committee that he was the MD for Tana and Athi River Development Corporation (TARDA) before transferring to KBC as the deputy MD from January 2000 to July 2001. He served as MD for 8 months from July 2002 to April 2003 before being suspended pending investigations in a manner he deemed to be unprofessional. The former MD outlined the following as the main problems facing the corporation according to his perspective as a former MD. i) KBC finances – Mr. Munywoki stated that the main revenue of KBC was drawn from radio and TV licenses and a few commercials. He reiterated that the cancellation of the T.V and radio levies adversely affected the corporation’s revenues. He further informed the Committee that the KSh. 8billion Japanese loan for the MW equipment received in 1987, had increased to Ksh. 23b thus heavily increasing the corporation’s debt. The former MD stated that KBC had revenue of about 1.2billion but an expenditure of Ksh. 1.9 billion thus they corporation perpetually operated on a deficit. ii) Bloated workforce -The Corporation has a bloated workforce which has continued to increase due to myriad reasons including political pressure and influence on management to employ more staff. The former MD stated that there were 1200 employees, 800 of them being permanent leading to a huge wage bill of about Ksh. 850million. iii) The equipment at KBC was obsolete including the Medium Wave (MW) equipment procured from Japan. He proposed the acquisition of new UHF transmission equipment. iv) Negative perception- Mr. Munywoki cited the negative perception of KBC as a government mouthpiece hence leading to advertisers’ failure to air their advertisements through the Corporation. In addition, the public also give little listenership to the station because they perceived the station’s news to be skewed and biased towards government. v) Interference- He recounted instances whereby instructions were issued to the management to censor some bulletins. vi) KBC Act- An outdated and restrictive KBC Act. Mr. Munywoki proposed the following solutions to the challenges raised. That:- i) In order to revive KBCs financial status, the government should write off the Japanese debt and replace the obsolete equipment. ii) Experts should be engaged in order to comprehensively restructure KBC so as to reduce the bloated workforce and huge wage bill as was the case was with Post-Bank. Following this restructuring, the government should upgrade the Corporation’s status from grade D to B considering its important role of a national broadcaster. iii) Modern equipment should be procured so as to increase efficiency and reduce the huge power costs which currently add up to about Ksh. 200 million monthly. iv) The government should refrain from interference in the operations of the corporation in order to improve its image. He reiterated that the recruitment of both senior and junior positions should be strictly based on merit and not political influence. v) The KBC Act should be repealed. 2.4.2 Mr. David Waweru Mr. David Waweru was the KBC MD from August 2006 to 2010 when he was sacked following the controversial 2010 world cup FIFA rights award. i) Mr. Waweru informed the Committee that during his tenure, a policy on recruitment, appointment and promotion was in place. This was rarely adhered to due to political interference in the management of the corporation. He cited influence in simple procedures such as transfers and promotions because some employees had political “godfathers”. ii) According to Mr. Waweru, employment of casuals at KBC was done on demand basis by the personnel manager with the approval of the board. This however left loopholes for abuse. iii) Mr. Waweru stated that there were no official reports of sexual harassment but it was widely believed that such cases were likely to occur in the studios at night. The personnel manager countered the possibility of the occurrence of this vice by taking the employees for discussions on morals and discipline from time to time. iv) The tendering and receipt committee was intact during his tenure and there were no cases of misappropriation of funds or corruption in the tendering and procurement processes. He however clarified that during his tenure, a board member by the name Mr. Ben Gituku was also a distributor of Radio Africa’s Star newspaper. v) He admitted that there was some political pressure on the management but it was dependent upon the management and the board to succumb to such pressure. vi) Mr. Waweru stated that the sales commission structure at KBC was approved by the MD and that during his tenure, he ensured that the structure was analyzed by the internal audit team before he signed it. As regards to the payment done by Parliament to the corporation, he stated that an Eng. Gichina Kanyi was best placed to provide details. vii) He was of the opinion that metro FM was a youth station but was neither a profit making nor a loss making station. According to him, it was a good station that should not have been closed. viii) With regards to the FIFA 2010 World Cup rights which was currently in court and had caused his sacking together with the then corporation secretary, Mr. Waweru explained that the terms of the agreement between KBC and Radio Africa Ltd. were exclusive to TV rights and KBC was therefore at liberty to sell the audio rights to other stations. In line with this, the corporation sold radio rights to Royal Media services (RMS) and Milele FM radio. Mr. Waweru further affirmed that the corporation did not receive funding of KSh. 70 million from the Government as alleged to purchase the FIFA rights. ix) Mr. Waweru claimed that he had made several reforms during his tenure as MD including;-  Retrenchment of the bloated staff 6 months into his employment. He also introduced performance contracts in order to establish a lean and qualified workforce.  Refusing to misuse the frequencies of the station for political expediency by the government. This was the case especially during the 2007 elections in which he categorically refused the misuse of the corporation frequencies by PNU for political gain.  He instituted cost cutting measures in the operations for instance he reduced transport costs by 30%.  He created the profit making and popular radio stations e.g. Coro FM and Pwani FM.  With regard to the MW equipment loaned from Japan, he prepared a dossier for cancellation of the Japan debt and handed it over to the President to present it during his official visit to Japan. Mr. Waweru outlined the problems facing KBC as follows;-  Huge debts owed to KPLC and Telkom Kenya. It was a common occurrence for power and telephone connections to be arbitrarily cut off thus affecting the corporation’s operations.  The KSh. 20 billion debt owed for the MW equipment which KBC was remitting to Treasury in order to offset the loan, heavily affected the corporation’s financial status.  The bloated workforce which led to a complex staff structure. Retrenching non-performing staff was difficult (due to many factors such as lack of funds) hence the management was forced to hire new staff to execute the duties of the non-performing staff.  Lack of funding from the government notwithstanding the fact it was a State Corporation.  Use of outdated technology.  The divergent backgrounds and interests of the board members that were sometimes in conflict with the corporation’s interests. He proposed the following solutions to these problems:-  KBC should commence the purchase and utilization of FM transmitters and migrate from analogue to digital as soon as possible.  KBC management should comprise of qualified and competent personnel. The Board should equally be composed of technical and qualified people such as mechanical engineers, broadcast engineers and media experts etc. whose input would be of value to the company. 2.4.3 A witness appearing before the joint Committee in camera informed the Committee that:- i) The State Corporation suffered from an identity crisis since it previously enjoyed a monopoly as the sole broadcaster before the entrants of other private media houses. Some of KBC’s stations were in place for public good such as the Rendille FM which had a low listenership but aired programmes on specific topics that were informative to the Rendille. ii) KBC is crippled by financial challenges which are mainly caused by the government’s failure to fund the corporation therefore leading to the inability to manage the costs. Attempts by the management to get more funds were unsuccessful. iii) KBC had a bloated and frustrated workforce that was trained in the monopolistic era. The personnel had a lethargic attitude since they had no motivation to perform well. iv) KBC did not have a single unique proposition to offer. Its previous unique proposition of being a monopoly, offering vernacular radio programmes and having a wide reach in the rural and remote areas of the country had all been challenged and taken over by private media stations. According to a study done by Synovate, Citizen had 88%; KTN had 55%; NTV had 51%; and KBC had 45% geographical reach. With regards to the audience share, Citizen had 52%; KTN had 14%; NTV had 12%; and KBC had 11%. v) Lack of political will to solve the problems at KBC compounded the corporation’s problems further. He further added that the current model/structure of KBC was one of the major causes of its problems and not the management as was widely believed. vi) He has never witnessed a situation where board members transacted business with the corporation. vii) He has never received any official complaint of sexual harassment. viii) He agreed that the Medium Wave equipment procured from Japan was indeed obsolete and the government should approach the Japanese government for the cancellation of the loan. Further, the management should procure new and modern equipments to improve efficiency. ix) He informed the Committee that credit at KBC was authorised by the management and that the corporation had accumulated a huge list of debtors because it lacked good tracking systems and poor management of clients’ payments. x) He recommended an audit of the human resource to streamline the bloated workforce. xi) The witness proposed that KBC had to seek for a unique proposition to offer the market in order for it to survive. He recommended borrowing from the British Broadcasting Corporation (BBC) model which is fully funded by government and professionally managed. He further proposed that KBC should focus more on its public service mandate as opposed to the commercial venture. 2.5 EVIDENCE BY THE MINISTER FOR FINANCE The Minister for Finance, Hon. Robinson Githae, EGH, MP appeared before the joint Committee on Tuesday March 20, 2012. He was accompanied by the Investments secretary Ms. Esther Koimett, CBS. The Finance Minister informed the Committee that:- i) The loan from Japan for the Medium Wave (MW) equipment was a Government guaranteed loan. He stated that the Government has been paying the loan on behalf of KBC but it has been debiting the corporation through the years. ii) Initially when the equipment was procured (in June 28th 1989), it was valued at KSh. 2.3 billion (16 billion Japanese Yen) at a rate of KSh 7.4 cts/100 Yen and an interest of 2.5% which was payable semi-annually. When the project was completed in 1994, the debt stood at Ksh 8.2 billion with an exchange rate of Ksh 54/ 100 Yen. The fluctuation of the exchange rates therefore caused the increase of the loan to KSh 22 billion. iii) The Minister who informed the Committee that he had examined KBCs income and financial statements stated that there were three elements that negatively affected the corporation. These were:- a) High financial charges b) High personnel emoluments which constituted a third of all the expenses c) Depreciation of KBC assets hence the Corporation needed to find the title deeds for their land. iv) The Minister was concerned that the personal emoluments at KBC were too high and there was need for internal mechanisms to address the issue. He informed the Committee that Treasury planned to restructure the balance sheet of KBC with the specific aim of turning the huge debts into equity. He was however concerned that asset valuation process could be delayed by failure by KBC to produce some of the title deeds to their land. He therefore called for the management to acquire their title deeds as soon as possible. v) Though the Minister stated that though the corporation was technically insolvent, the Government has continued to fund the corporation because it was a strategic institution with a public service mandate. The funding over the years are KSh.1.3 billion in 2007/2008, KSh.352 million in 2008/2009, KSh. 200 m in 2009/2010, KSh. 450 m in 2010/2011 and KSh. 650m in 2011/2012. The Minister stated that it was not possible to up-grade the Corporation because it needed to sustain itself first before it was upgraded. He explained this by stating that State Corporations were graded according to their status for instance, those at grade D were those that were highly dependent on the Government while those at Grade A remitted returns to the Government such as the Kenya Pipeline Company (KPC). vi) The Minister informed the Members that the private media owners protested a previous directive by the former head of civil service that all Government TV advertisements should be channeled through KBC. They referred to the Public Procurement Act which made it unlawful for government agencies to directly award contracts without tendering. The government could therefore not issue similar directives. vii) The 2010 FIFA world cup rights was purely an initiative of KBC and the Treasury never issued any funds for the purchase of these rights. viii) Treasury had committed to the following in order to improve KBCs financial status:-  Review the reinstatement of TV licensing because the removal of this licensing had adversely affected the revenues of KBC.  Increasing financial support to the Corporation’s profitable ventures and subsidizing the non-profit services that are for the public good.  Restructure the balance sheet of KBC and converting its debt into equity. The Minister assured the Committee that he would follow-up the matter at the Cabinet level in order to seek ways of finding a comprehensive solution to the Corporation’s challenges. 2.6 MEETING WITH ENGINEER GICHINA KANYI The Committee held a meeting with Eng. Gichina Kanyi a KBC employee on Wednesday April 4, 2012. Eng. Kanyi who is currently seconded to the Parliamentary Broadcasting Unit was employed at the corporation during the procurement of the Japanese MW equipment. The Committee heard that:- i) The Voice of Kenya (VOK) was declared “functionally dead” in 1987 by a Presidential Working Commission. The Commission recommended that the organization be restructured and new equipment procured. This led to the procurement of the MW equipment from NEC. The MW equipments were supposed to modernize radio broadcasting in Garissa station, Voi station, Yala station and Ngong station. ii) The loan amount included the package for technical consultants and government technical officers. The Government technical officers were not involved in the preparation of terms of reference for the project. iii) Eng, Kanyi was a junior employee then since he had just joined the corporation from the University and together with other Engineers, he was taken to Japan for training on the operationalisation and maintenance of the equipment. iv) The medium wave equipment was good because of its wide coverage and its ability not to be affected by natural barriers. Its only disadvantage was that it had low clarity compared to FM technology and was very costly. v) According to Eng. Kanyi, NEC was a reputable company thus the Government received the best equipment available in the market then. MW equipment is still very important because it can be used to broadcast to remote areas of the country. He however felt that a mix or infusion of medium wave technology and FM technology was very useful. vi) In hindsight, Eng. Kanyi admitted that given the chance again, he would implement more FM transmission sites in the country balanced with some MW technology to enhance broadcast coverage. vii) Eng. Kanyi was not aware of any commission payments to members of staff of KBC from the proceeds of Parliament’s live broadcast. He denied ever receiving any such commission payments. Eng. Kanyi was seconded to Parliament from KBC but received an allowance directly from Parliament. viii) He had never heard of any sexually harassment cases in his stay at KBC and had never in his life sexually harassed anyone. The Committee made the observations that Eng. Kanyi was not fully aware of the intricacies surrounding the procurement of the MW equipment from Japan considering he was just a junior officer then. 2.7 MEETING WITH THE PERSON ACCUSED OF SEXUAL HARASSMENT The Committee held a meeting with the accused person on Wednesday 4th April 2012 and heard that:- i) He had worked at KBC for almost six (6) years during which no one had ever accused him of sexual harassment. ii) He refuted the claims that he had bought gifts for any casuals or his colleagues nor invited them to exotic trips. He however admitted to have bought one of his colleagues (the alleged victim) a bottle of Amarula on his return from South Africa but denied ever buying her chocolates or perfume as she had alleged. iii) He was a friend of the alleged victim and in fact he had recommended her for employment at Metro FM. iv) His fallout with the alleged victim was purely work related and he had never attempted to sexually harass her at any given time. v) The witness suspected that he was being vilified because of his opposition to the strike since he continued to perform his duties while the other staffs were still on strike. He also suspected that his tough stance on his subordinates made him a target of the allegations. vi) He requested the Committee to fully investigate the allegations by his accusers because they were motivated by vengeance. vii) He recommended a proper recruitment policy to be put in place at KBC. This was because most of the staffs were not professionals nor competent enough to work for such an important Corporation. The Corporation had suffered brain drain as a result of most competent staff getting employed by other highly competitive media stations. viii) He assured the committee that he was not going to victimize his accusers. 2.8 MEETING WITH MR. PATRICK QUARCOO The Committee held a meeting on April 4, 2012 with Mr. Patrick Quarcoo, the CEO of Radio Africa Ltd. The purpose of the meeting was to deliberate on the saga surrounding the 2010 FIFA World Cup Rights. The matter was currently in court. Mr. Quarcoo informed the Committee that:- i) The General Manager of KBC approached him in June 2009 and informed him that KBC had acquired exclusive rights to air the 2010 FIFA world cup. Upon further discussions, he decided to partner with KBC and exploit the rights which had been advertised in the local daily. He wrote to KBC expressing interest and was later invited to make a presentation. Radio Africa won the deal fairly. ii) Radio Africa signed an agreement with KBC whose terms included a 50-50 share of the cost and a 40-60 revenue share. Radio Africa would use its strong marketing infrastructure to advertise the 2010 World Cup tournament. iii) The Memorandum of Understanding (MoU) signed clearly indicated that no third party was going to be involved in the deal. However, KBC breached the agreement by selling the rights to Royal Media Services. The claim that the exclusive rights were only restricted to TV rights was therefore untrue. The Radio Africa Ltd. Team had discussed the exploitation of radio rights during their sales pitch to KBC and moreover the radio rights issue was included in the joint launch by the two media stations. iv) The two (2) companies held a joint account and collected over Kshs. 120 million but this fell short of the forecasted return of over Ksh. 300 million mainly because of the confusion created in the market by the controversy. v) Mr. Quarcoo later discovered that KBC had short changed him. He discovered that the deal with FIFA did not in any way give KBC the right to sell the exclusive rights to any other party. Furthermore, the actual amount that KBC paid for the rights to FIFA was $450,000 and not $700,000 as alluded. He contacted the Kenya Anti-Corruption Commission (KACC) and reported the matter. vi) He knew of a Mr. Ben Gituku who had done business once with one of Radio Africa’s subsidiaries, the Star Newspaper. Mr. Gituku was contracted to deliver newspapers to Nyeri. He categorically denied any other association with him. vii) Mr. Quarcoo cautioned that the move from analogue to digital was going to completely take away KBC’s dominance in the remotest areas in Kenya. He however proposed that for KBC to survive in the dynamic media industry, it should be properly funded; should focus more on public service as opposed to commercial activities; should be a training ground because of its high journalism standards; should shift from MW to FM technology; and should be run by professionals. 2.9 ADDITIONAL EVIDENCE BY THE MANAGEMENT OF KBC The management appeared before the joint Committee for the second time on April 4 2012, and gave the following additional evidence:- i) That at the beginning of 2012, the management had procured the services of a law firm to facilitate KBC obtain title deeds for its lands. ii) The management had commenced the process of de-commissioning the MW equipment and installing the FM technology in most stations around the country. The Masinde Muliro University had already expressed interest in the medium wave equipment for their engineering course. iii) With regard to storage and disposal of their old furniture, the management had on several occasions advertised for their sale but they had not received any buyers. The management had therefore made the decision to transport the furniture to Lang’ata for storage before disposal. iv) An ad hoc committee to deliberate on the sale of KBCs unutilized parcels of lands had been formed. v) The MD confirmed that the corporation had received KSh. 650 million from Treasury in the 2011/2012 financial year. However, these funds were inadequate considering the stringent conditions from Treasury on their usage. Further, a huge amount of these funds was used up by recurrent expenditure such as power bills thus leaving little funds for development of the corporation. vi) The move to transfer vernacular stations to Nairobi was a business decision to provide 24 hour service to the listeners as the initial service operated on limited hours. They assured the committee that they would not phase out the vernacular stations and had just temporarily migrated their broadcasting to Nairobi. vii) The corporation’s tender and receipt committee which is responsible for evaluation of all tenders, is composed of heads of departments. The corporation secretary Mr. Paul Jilani was the Chairman of the Committee while the procurement manager was the secretary. viii) Most of the tenders were open tenders. Though three (3) companies associated with one individual had won tenders, they were all different tenders and this was not unlawful according to the Public Procurement Act. ix) The MD stated that the corporation had recruited Mr. Walter Mong’are as the radio programmes manager for his talent and brand so as to increase radio revenues. The MD was however categorical that he was not present when Mr. Mong’are was recruited. 2.10 EVIDENCE FROM THE WITNESS OF SEXUAL HARASSMENT The Committee held a meeting on Tuesday April 3, 2012 in camera with one of the witnesses accused by the alleged victim of shielding the accused. The witness who was under oath informed the Committee that:- i) She had not been approached by any employee over the claims of sexual harassment in the recent past. The only case she had handled involved a Ms. Pauline Muturi who claimed she had been sexually harassed by a Mr. Ochako who was sacked from the corporation around two years ago. ii) She had worked with the accused for five years and she had never come across any complaint of sexual harassment from his colleagues. The only complaint she received was that he was very tough on his subordinates who in her opinion were lazy and not able to meet targets. iii) At no one time had she protected the accused against charges of sexual harassment. According to the witness, the accused was only vilified because of his tough and uncompromising work ethic. iv) She was however aware that the alleged victim and the accused had fallen out under unknown circumstances which adversely affected their working relationship. Following the meeting, the Committee observed that:- 1) The testimony given by the witness was credible and she had convinced the Committee beyond any doubt that the claims that she was protecting the accused were not substantive. 2) It was impossible to interrogate the witness without revealing the identity of the alleged victim. 3) The witness was a mentor of the victim and according to her testimony she had done everything possible to guide her. 2.11MEETING WITH ENG. PHILLIP OKUNDI The Committee met with Eng. Phillip Okundi on April 11, 2012 in his capacity as the chairman of the Presidential Working Group in charge of restructuring VOK and responsible for procuring the MW equipment from Japan. The Committee heard that:- i) He was appointed the chairman of the Presidential Working Party in 1989 to make recommendations for the reforms of VoK into a state enterprise managed commercial so as to reduce its dependency on Treasury; ii) KBC was established under an Act of Parliament just like other Parastatals and that the late Dr. Julius Kiano was appointed the Chairman; iii) In 1993, he was appointed the MD of KBC which he managed well although KBC was not totally self reliant yet; iv) Most of the money raised was used to develop staff and infrastructure; v) He left KBC for Kenya Bureau of Statistics (KBS) in 1997. Regarding the MW equipment acquired from Japan, Eng. Okundi indicated to the Committee that the funds were issued in form of a grant. On being informed by the Committee that this could not be the case considering KBC was still servicing the loan through Treasury, Eng. Okundi requested for time to seek for the facts surrounding the issue considering it took place more than 20 years ago. 2.12 MEETING WITH THE CHIEF OF THE RADIATION PROTECTION BOARD On Wednesday April 11, 2012 the Committee met with the Chief of the Radiation Board who informed the Committee that:- i) The radiation protection board was mandated to deal with ionized radiation but the radiation under discussion is non –ionized radiation. ii) Kenya lacks a legal framework on non-ionized radiation and that there was a zero draft bill on the same. iii) The board identified the gap and resolved to work with other relevant bodies including the Communication Commission of Kenya (CCK). The Board and CCK have an MOU whereby the board provides technical advice to CCK on invitation. iv) Occupational exposure varies from one station to the other and as at 12th April 2012 KBC offices in Nairobi were checked and were found to be below the 10% watts per meter square. v) That funds allocated are not enough to manage radioactive waste project that is ongoing in Karen. That the Ksh. 800 million project had only received 200 million shillings in the last two years; Following the deliberations the Committee raised the concerns on the alarming and rising levels of cancer in the country and sought to understand its link to radiation. It was also concerned that the management of radiation in the country was extremely underfunded. The Committee recommended that the 66 KBC Stations should be screened for non-ionized radiation. 2.13 WRAP UP MEETING WITH THE MINISTER FOR INFORMATION AND COMMUNICATIONS The Committee held a wrap up meeting with the Minister for Information Hon. Samwel Poghishio, EBS, MP on Wednesday April 11, 2012. The Committee heard that:- i) The Ministry was aware that KBC had a lot of assets some of which was being encroached on especially land without title deeds. The PS had made several efforts to address the matter including drafting cabinet memo’s with little success. ii) The PS denied the allegations that the Ministry interferes in the running of KBC and that he had no hand in the appointment of either the Board or the MD. iii) The PS denied the allegations that staffs were being victimized for participating in the strike and informed the Committee that no staff or artistes were issued with sacking threats. With regard to the issue of forcing artistes to sign new contracts, the PS informed the Committee that the artistes would be hired but their previous years of service at KBC could not be included in the new contracts. iv) The PS admitted that there was an irregularity in contracting artistes on a temporary basis for too long without hiring them on permanent and pensionable terms. 2.14 FINAL SUBMISSION BY THE PETITIONERS Appearing before the joint Committee on April 19, 2012 for a wrap up meeting, the representatives of the petitioners provided the following additional evidence. 1. Return to work formula The petitioners stated that the return to work formula had generally not been adhered to. 2. KBC assets and equipment audit (i) KBC owns a lot of assets but is ironically heavily indebted. The Committee heard that a parking space near the KBC offices in Nairobi was being operated by Stella scope trading Company yet KBC owed KSh 231 million shillings arrears in land rate charges with regard to this parking. (ii) That the equipment at KBC was obsolete. (iii) That management seems to collude with scrupulous individuals to grab KBC land. The KBC land in Komarock had been distributed to private developers but was only reverted after the area Member of Parliament raised the concern. (iv) That there was need for an audit of the KBC staff houses in Shauri moyo. 3. Content manipulation and interference The petitioners stated that KBC’s broadcast content is manipulated and cited cases whereby news anchors received calls just before going on air to delete particular news. For instance, the petitioners alleged that they had been instructed not to interview MPs during the joint Committee inquiry and that a particular news anchor had been asked to delete clips of the Committee visit to KBC Nairobi offices. 4. Irregular payments on Commission on revenue collection There is irregular payment of commissions for revenue collection as only some of the KBC debt collection staff were getting paid contrary to the discussions with the management. The Committee heard that the disparity had caused a rift among staff in the department. 5. Pensions and Medical Scheme The Committee heard that there is mismanagement of the pension scheme and that there was a likelihood of KSh 700 million shillings of workers pension getting lost. The medical scheme was running into arrears of millions of shillings due to non remittance by the management. 6. Hiring and Promotion The Committee heard that the management had hired new managers without following due process despite the claims that KBC was overstaffed. These managers included:-  Deputy Editor in Chief who was head hunted from K24  Human Resource Manager who was freshly recruited  Editor in chief who is an immediate former Board Member The deputy editor in Chief’s position was not advertised. The petitioners informed the Committee that the marketing department of KBC was a small department yet it has three managers thus the staffs were not sure who to take instructions from. The petitioners requested the Committee to do the following:- (i) To assist the petitioners by requesting the management to provide a list of how much the organization owed each individual staff member; (ii) To intervene on behalf of the artistes who were being forced to sign a three month contract which will cause them to lose the earlier years they had worked for KBC; (iii) To review the KBC Act (CAP 221), with a view to harmonizing the law with the Constitution and strengthening the competitiveness of KBC. The Committee noted the following:- (i) That the allegations of victimization had been supported with evidence. (ii) That the sexual harassment allegations could not be substantiated; (iii) That the allegations on content manipulation were backed with evidence of cited cases; (iv) That the ‘back-to-work-formula’ has been violated only to the extent that the artistes were under duress to sign a 3 month contract. However, some aspects of the formula were to be implemented over a certain period of time and the Committee could therefore not determine whether they had been violated or not. (v) That the assets of KBC are likely to end up in private hands if the legal documents of legitimate ownership are not fast tracked; (vi) That the petitioners presented a list of staff totaling 877 employees in the KBC payroll as at March 2012. Some of the employees were alleged to have since died or left KBC. That KBC is therefore not overstaffed in view of the fact that the difference in the list of staff is the additional list of artisans who are not on full employment; (vii) That KBC had just hired new staff amidst their own management claim of being overstaffed. KBC management does not follow proper hiring and promotion procedures; (viii) That KBC has a weak organogram that is subject to manipulation. 2.15 VISIT TO KBC OFFICES IN KISUMU The Committee visited the Kisumu offices on 22nd March 2012 and heard that:- i) Kisumu regional office is headed by a Controller, Mr. Julius Chacha. He is in-charge of the affairs of the Nyanza and Western region. ii) The Kisumu office was basically a vernacular station base and most transmitting stations apart from Yala station were operating on medium wave. iii) Kisumu hosts MTN and KEMRI on their transmitters and there were no cases of piggy-backing on KBC transmitters spread around the region. iv) Employee issues were handled at the Nairobi office and over the years this had created confusion in the management of employees based in the regional offices. v) The regional offices required additional staff and equipment e.g. portable recording machines. vi) The technical staff alleged that they were not being compensated for the overtime services they provided. vii) There were no clear-cut policies on promotions as some employees were promoted to head certain divisions but their pay-grade was two levels lower. viii) After Yala transmission station switched from MW to FM technology, power consumption automatically reduced. The power cost was reduced from approximately KSh 1,000,000 to KSh 30,000. The joint committee found out the following. That:- i) Kisumu regional office was operating on a small work force whereas in Nairobi there were citations of a bloated workforce. ii) The Kisumu offices were located on a 12 acre piece of land. However, the land was not being fully utilized just as was the case at the Yala transmission site. iii) The medium wave equipment that was decommissioned at the Yala transmission station was occupying a lot of space. The Corporation should consider donating the equipment to Kenyan Universities for research. iv) Regional technicians should be fully involved in the procurement and supply of new equipments and spare parts. v) The Human Resource manager in Kisumu was facing a lot of challenges in the management of the regional staff considering she was reduced to only implementing the decisions made at the KBC headquarters in Nairobi. vi) The staff did not have the title deeds for the lands where the Kisumu regional office and the Yala transmission site were located and therefore the land was prone to land grabbing schemes hatched by unscrupulous people. 2.16 VISIT TO KBC OFFICES IN NAIROBI The Committee visited the Nairobi offices on Tuesday 27 March, 2012 and noted that:- i) The building did not have adequate security and the rooms housing crucial equipment were easily accessible. ii) The production centre had poor air conditioning and was not conducive especially during the hot season. iii) The number of staff restrooms was inadequate compared to the large number of staff. Further, the restrooms did not have the essentials like toilet papers, hand dryer etc. iv) The organization was crowded with many people walking around. It was very hard for one to distinguish between a visitor, an intern and staff. v) The building did not have wireless internet connection thus affecting communication especially for staff in the production department. The staff resorted to printing and physically transferring information which led to time wastage. vi) The training and maintenance room was of low standards and could be confused for a junk yard. vii) There was poor storage of excess and obsolete equipment leading to high depreciation of the equipment. The Committee observed that the government was losing millions of shillings due to high depreciation of the equipment. viii) The offices at KBC were in a poor state. The library had worn out furniture; out-dated books; lacked space; the HR department which was a tiny room with spoilt floors, lacked ICT facilities and had personnel files which were rotting. ix) The digital platform needed to be rolled out countrywide in order to increase efficiency and effectiveness in broadcasting. x) The joint Committee recommended the refurbishment of the production room, library, and restrooms. 2.17 VISIT TO KBC OFFICES IN NYERI The Committee visited the Nyeri offices on Wednesday 28th March 2012 and heard that:- i) The technical staff does general operation, routine and corrective maintenance work for both KBC and private transmitters hosted at the Nyeri transmitting station. ii) The services were run on a 24 hour basis and operated on shifts to ensure that all hours were covered. The Chief Technical Officer (CTO) was usually on standby throughout. The staff however did not receive overtime for the extended working hours. iii) The employees on the night shift were prone to radiation leaks from the micro- waves because they did not have protective gear. iv) The site had old equipment that needed replacement. They had requested management to provide them with back-up equipments but were yet to receive them. v) The Nyeri site was understaffed. Further, the staffs were underpaid. vi) The staff complained of job stagnation and irregular promotions. vii) There were irregular appointments and use of inexistent job titles for instance Engineer in charge. The correct job title was Chief Technical Officer in job group BE 4. viii) The requisition period for spare parts was very long. ix) The site did not have internet connection forcing the employees to go to a cyber cafe – about 10km in town- in order to communicate with their clients or management in Nairobi. They also relied on speed posts to communicate with management in Nairobi. x) The employees at the station have been using a borrowed mobile phone since March 2009. A requisition No. 105826 dated 20/03/2009 was raised for the said item and approved for purchase by the relevant committee but the phone has never been delivered to date. xi) There were no cases of sexual harassment at the site. xii) The employees at the site were demoralized because they did not receive any recognition, appreciation or motivation from the management when they performed a commendable job. During the tour of the Nyeri KBC transmission site, the Committee noted that the employees were prone to radiation leaks. The Committee therefore recommended that the Radiation Protection Agency conducts a radiation study at all KBC sites. 2.18VISIT TO KBC OFFICES IN MOMBASA The Committee visited the KBC Mombasa offices in Nyali on Friday May 4th, 2012 and made observations that:- i) The Nyali property is 22 acres, a quarter (¼) of which has been grabbed by the Mombasa Municipal council. The matter is before the Mombasa law courts. ii) There were no staff deployed on site except a sweeper and one security guard employed by KBC. iii) There is a shortage of equipment as only 13 computers were serving the 47 staff. iv) The offices were generally untidy and stuffy and that the studios were in bad shape and lacked equipment. v) The roof was leaking and the walls of the building were likely to collapse especially in the radio link room. vi) The cameras in use were obsolete. vii) The central air conditioning had collapsed fifteen (15) years ago. viii) Bureaucracy and red tape is excessive at KBC. ix) The Pwani studio was occupied by four (4) strangers who were said to be friends of the radio presenter. x) There was poor security at KBC as it was guarded by unarmed security officers. The perimeter fence was wasting away therefore the building was easily accessible to outsiders. xi) The Mombasa KBC station was neglected by the management. xii) The staffers in the sales office were well organized. The marketers had a target of KSh. 6 Million per month for Pwani FM radio and were able to achieve a collection of between Ksh.4.5 to 5.5 million per month. The Committee observed that Pwani FM was profitable and congratulated the marketing department. xiii) The Committee noted the concern of the department that their commission payments took more than three (3) months due to bureaucracy at the headquarters in Nairobi. xiv) The Committee was given a media blackout during the tour of the Nairobi KBC facilities on the 27th March 2012. xv) The staff were qualified but underutilized. They further lacked training and capacity building programmes for its staff. xvi) There was a weak internal communication structure. xvii) Mombasa was initially designed to operate a TV station with 14 TV channels which were disbanded by the former MD Mr. Wachira Waruru on the basis that they were not profitable. The Committee was requested to recommend the revitalization of the TV station. xviii) The work environment was extremely poor and characterized by salary and commission delays. CHAPTER THREE: COMMITTEE’S FINDINGS, OBSERVATIONS AND CONCLUSIONS The Committee made the following findings, observations and conclusions and recommendations. Administrative issues i) The Committee notes that the recruitment and promotion procedures of staff at KBC are questionable. ii) The Committee finds that the circumstances in which all the employees were promoted one scale higher without any financial benefit was irregular. The Committee notes that the management had stated that they were implementing a recommendation of the FKE report yet upon scrutiny of the said report the Committee found that it did not make any specific recommendation to that effect. iii) The Committee observes that the management arbitrarily promoted the principal internal auditor, the assistant editor-in-Chief and the Finance Manager to a higher grade notwithstanding the fact that these officers had benefited from the mass promotion. iv) The Committee observes that the qualifications of the HRM as advertised in the papers on 8th April 2010 required the candidate to posses an undergraduate degree, a post graduate diploma in human resource management and a Masters in Business Administration. The Committee further observes that the qualifications of the MD required lower qualifications than the HRM of only an undergraduate degree in social Sciences despite the MDs position being a superior position. The Committee therefore notes the anomaly and further that the advertisement for the position of MD seemed to be in favour a specific candidate. v) The Committee notes that despite the critical role played by KBC as the State broadcaster, the Corporation’s employees are poorly remunerated. vi) The Committee notes that the FKE report contains suitable recommendations that can address the numerous administrative challenges faced by KBC. 2. The appointment of unqualified Radio Programmes Manager i) The Committee notes that the appointment of Mr. Walter Mong’are as the Radio Programmes Manager of KBC was irregular. Whereas the job description of the radio programmes manager required the candidate to possess a degree in communications, the documents submitted indicate that Mr. Mong’are holds a Diploma in Graphics (desk top publishing) from Kul Graphics and is yet to complete his degree at Kenyatta University (KU) which he has been pursuing since 1996. ii) Despite his inadequate qualifications, the Board sanctioned his recruitment to head a critical department based on his talent as a comedian. Indeed, the PS, Ministry of Information and Communications noted before the Committee that the board disregarded is advice to appointment Mr. Walter Mong’are to a position similar to his previous position as a comedian. iii) The Committee notes that the hiring of an unqualified manager has caused discomfort among KBC staff and was one of the reason for the strike 3. The plight of Artistes and casual staff of KBC i) The Committee notes that despite playing an important role at KBC, the artistes and casual staff have been neglected and are treated as second class employees notwithstanding the fact that a majority of them have superior academic qualifications than permanent employees of KBC . 4. Financial issues a) Exchequer support to KBC i) The Committee notes that KBC is insolvent a fact which the Minister for Information and Communications and the Minister for Finance concurred with and that there is need for massive injection of funding to KBC to protect it from imminent collapse. ii) The Committee notes that revenue collected at KBC is not properly documented. iii) The Committee observes that the Government has been funding the corporation because it is a strategic institution and that the funding over the years has been KSh.1.3 billion in 2007/2008, KSh.352 million in 2008/2009, KSh. 200 m in 2009/2010, KSh. 450m in 2010/2011 and KSh. 650m in 2011/2012. The Committee however notes that the expenditure of KBC is higher than the revenue and that there is need for increased funding to KBC. iv) The Committee notes that KBC has suffered from lack of financial support from the Government considering the government usually requested for live coverage of its functions yet it did not pay for the same. b) The Japanese Loan i) The Committee observes that the balance of the Japanese loan undertaken for the Radio MW modernization project in 1989 stood at KSh. 22 billion and was adversely affecting the corporations’ financial status. The Committee further observes that due to the inability of KBC to meet its loan repayment obligations Treasury was paying on its behalf but expected reimbursement from KBC with interest at market rates. ii) The Committee notes that the main cause of KBC’s financial problems is re-payment of this loan. According to the 2009 KBC accounts, the total gross income of KBC was Kshs. 1,405,644,645.06 against the expenditure of Kshs. 3,535,016,696.71 which comprised of financial charges of Kshs. 1,943,326,391.32 as the money paid to Treasury by KBC on account of the Japanese loan. As a result KBC made a loss of Kshs. 2,129,372,051.65. This confirms that KBC is solvent save for the Japanese loan. iii) The Committee observes that Treasury is considering the restructuring of the balance sheet of KBC and specifically turning the huge debt into equity. iv) The Committee is agreeable to the proposal that the government should encourage its agencies to place a certain percentage of their advertisements with KBC in a similar way it has compelled government agencies to use public facilities like conference centers. 5. Protection of the workforce i) The Constitution under Article 34 (4) has a provision for protecting state owned media from undue interference by government and their agents. The Committee however notes that there is no specific law protecting the office holders of State broadcasters from victimization for failing to yield to political influence. ii) The Committee further notes that to a certain extent, there has been interference in the management of the Corporation. This can be deduced from the exit of several MD’s under unclear circumstances and from the cited cases of influence on the broadcast content. iii) The Committee notes that the KBC Act Cap 221 is outdated and needs to be reviewed to make it consistent with Article 34 (4) of the Constitution and to confer independence to the managers of the institution to protect them from political interference. 6. Sexual harassment i) The Committee observes that both the former and current management claimed that there had not been any official reports of sexual harassment. However, the Committee notes that there were no channels or mechanisms for reporting such cases. ii) The Committee observes that the alleged sexual harassment victims were reluctant to appear before it for fear of victimization. The Committee therefore finds that the evidence was not sufficient to substantiate these claims. 7. Staff victimization Mr. Milton Nyakundi i) Having examined the correspondences between Mr. Milton Nyakundi and KBC the Committee finds that Mr. Nyakundi willingly resigned from KBC. The Committee observes that though Mr. Nyakundi alleged that he wrote the resignation letter under duress, the Committee was not able to confirm this allegation. The Committee however notes that the management was treating him unfairly by denying him access to the KBC premises to finalise his clearance. The Committee concludes that he has a right to access the premises to finalise his clearance and that the same ought to be granted. 7. Allegations of flawed Procurement Process a) Allegations of flaws in awarding of tenders and pre-qualification of Companies i) The Committee observed that tenders were awarded to several companies associated with one person. Evidence submitted before the Committee by the management of KBC confirms that York investments Ltd., Grand photolab E.A Ltd. and Leon Insurance company pre-qualifed by KBC are indeed owned by the same individual. The Committee is still awaiting the information from the Registrar of Societies and is therefore unable to establish the owners of Royal Business Technologies and Central Works Company even though the document tabled by the Management of KBC indicates that Royal Business Technologies has got only one Director, a Ms. Ann W. Kihu which the Committee finds unusual. ii) From the documents supplied by the Management of KBC, the Committee notes that the Grand Photolab and York Investments appears to have been involved in several tenders. iii) When the KBC management appeared before the Committee they disputed the above allegations and asserted that even though considerable business has been given to the three companies associated with one individual, at no point had the companies ever bid against each other on the same tender. iv) The Committee notes that a team from the Public Procurement Oversight Authority (PPOA) is investigating claims of alleged malpractice at KBC and in particular whether the procurement laws were adhered to. The Committee observes that the authority has requested the corporation for all the relevant documents . b) The case of Kenya Auto Electrical Ltd i) The Committee notes that there was no irregularity in the approval of a request by the Kenya Auto Electrical Ltd for extension of the tender closing date in its letter dated 5th March 2012. The Committee observes that the said company was not pre-qualified for the year 2011-13 though it is listed amongst the companies that collected tender documents for the year 2010-11 . With respect to the complaints raised against Kenya Auto Electrical Ltd concerning the letters dated 31/1/12, 9/2/12 and 5/3/12 , the Committee finds no irregularity considering the company was requesting for the original bid- bond in order to cancel it and not an extension of the tender. c) Conflict of Interest on part of Board Members Mr. Stephen Areba i) The Committee notes that Broadcast Solutions International Limited a company owned by a Board member, Mr. Stephen Areba was pre-qualified to supply equipment for the year 2011-2013 thereby constituting a clear case of conflict of interest on the part of the particular Board member and therefore in violation of section 12 of the Public Officers Ethics Act Cap. 183 and by extension impacting on the credibility of the entire KBC Board. ii) The Committee observes that the Chairman of the KBC Board Mr. Charles Muoki had mentioned that Mr. Stephen Areba had previously approached him requesting for permission to transact business with KBC a request which he turned down. He however stated that he was not aware whether Mr. Areba was currently transacting business with KBC. The MD clarified that there was an existing contract between KBC and BSI Ltd for co-siting though the tender was awarded long before Mr. Stephen Areba joined the Board. The Committee noted the discrepancy in the evidence provided by both the management and the Board. iii) Contrary to the above assertions, the Committee noted that the list of companies and business transacting with KBC for 2010-2011 and pre-qualification of supplier for 2011-13 , indicate that BSI Limited is pre-qualified for 2011-13 to supply the following to KBC:- a. CAT.A SUB.CAT.1 Supply of Transmitters b. CAT.A SUB.CAT.2 Supply of Broadcasting tapes, cassette, VCR, DVD & Players c. CAT.A SUB.CAT.3 Supply of Radio, TVs & other electronic requirement d. CAT.A SUB.CAT.2 Supply of Broadcasting tapes, cassette, VCR, DVD & Players iv) The invoices, payment vouchers, delivery notes, Local Purchase Orders (LPOs) and minutes of the KBC tender evaluation committee further show that BSI was awarded tenders and traded with KBC in the year 2010. The Committee notes that on 27th October, 2010, the Company was paid Kshs. 373,948.45 vide cheque No. 535716 for the supply of studio equipment and on 27th May, 2011, the said company was paid Kshs 94,500 by cheque number 770127 for supply of FM tuner. The Committee therefore notes that BSI traded with KBC in the year 2010 and 2011 and is a pre-qualified supplier for 2011-13 despite its director Mr. Stephen Areba being a Director of KBC. The Committee finds that the Chairman of the KBC Board and the MD deliberately misled the Committee with respect to the business relationship between KBC and BSI and that either the Chairman was being evasive in his evidence or he was truly not aware of the dealings at the corporation. Mr. Ben Gituku i) The Committee notes that Mr. Ben Gituku, a director of the KBC Board did not concurrently sit at the Board of Radio Africa Group Ltd but he had previously been a supplier for the Star Newspaper a subsidiary of the Radio Africa Ltd. The Committee notes that Mr. Gituku had written a letter to the Committee refuting the claims. The Committee however observes that he sat at the KBC Board during the award of the FIFA World Cup rights in 2010 to Radio Africa Ltd. 8. Misappropriation of funds from the Parliamentary Broadcasting Services i) The Committee observes that KBC receives Kshs. 15 million monthly from the KNA on account of live coverage of proceedings. The Committee however finds that the submission by the management that the proceeds were used to purchase cameras dissatisfactory since the Parliamentary Broadcasting Unit (PBU) has acquired its own cameras. ii) The Committee is dissatisfied with the response by the KBC management to counter allegations that a commission of Kshs. 200,000/- is paid to one of the senior managers at KBC. The management in their submission informed the Committee that payment of commissions at KBC was based on the revenue collected and the targets set. Considering Parliament was one of the sources of revenue, a commission was paid from the proceeds of live broadcast of Parliamentary proceedings to the employee in charge of the Parliamentary account. iii) The Committee was further informed that the commission rates were dependent on the grade and that the money was pooled and distributed to all the staff involved in the process. The Committee however notes that there is apparent discrepancy in these commission payments considering the PBU staff disputed receiving any Commissions from the “pooled money” despite playing a crucial role in the “process”. iv) The Committee further notes that KBC’s award of commission to its staff was prone to abuse. While acknowledging that it is common practice for media houses to award commission to a section of its employees particularly marketers, the Committee notes that at KBC, sales commissions are paid to marketing staff and revenue collection commissions to finance staff. From the documents submitted , the Committee finds that the payment of these commissions is skewed. 9. Corrupt practices on part of senior staff of KBC 10. The closure of Metro FM and the establishment of Venus FM i) The Committee notes that the decision to close Metro FM and to set up Venus FM was informed by sound commercial decisions and that there is little the Corporation could have done in view of the dwindling advertising revenue. 11. Status of KBC land iii) The Committee notes that KBC has 36 parcels of land scattered in different parts of the country with an estimated market value of Ksh. 2.8 billion. The Committee however notes that the management does not possess the title deeds to all the parcels of land. iv) The Committee further notes with concern that land had been grabbed at the Mombasa site and was the subject of a court case. 12. Working conditions at KBC facilities i) Following the tour of the KBC stations and transmission sites in Nairobi, Kisumu, Nyeri and Mombasa, the Committee observes that the working environment was not conducive and that the offices needed thorough refurbishment. ii) The Committee further notes that the management of the KBC sites was centered at the KBC headquarters in Nairobi therefore causing operational delays. Further, the staff based at the transmission sites were neglected. iii) Following the visit to Nyeri transmission site, the Committee is concerned that the level of radiation emission from the equipments is high and that the same has had an adverse effect on the health of the staff working there. From its interaction with the Radiation Protection Board of Kenya, the Committee notes with concern that the Board is not in a position to measure and monitor Non- Ionizing Radiation (NIR) in the country due to poor funding and a weak regulatory frame work. 13. ICT and Technical Issues i) The Committee observes that KBC has outdated equipment and lags behind in the ICT and technical area. The Committee notes that there is a glaring lack of ICT and technical maintenance tools in key operation areas coupled with lack of well equipped workshops for equipment testing and corrective maintenance. CHAPTER FOUR: RECOMMENDATIONS The joint Committee recommends that:- 1. KBC should be restructured and reformed to a National Public Broadcaster fully funded by the Exchequer. The new structure of KBC should include among others, a commercial department, a technical department and an infrastructure department. 2. Considering the present state of affairs at KBC most of which have been caused by poor management and administration, the Board of Directors and the Management of KBC should take responsibility. 3. The joint Committee is concerned by the failure of the Minister for Information to implement an earlier recommendation made by the Departmental Committee on Energy, Information and Communications and adopted by Parliament that the KBC Board be re-constituted. The joint Committee recommends that the Minister for Information and Communications disbands and reconstitutes the Board of KBC, within thirty days. 4. All the senior managers and heads of department of KBC should be interviewed and vetted by the newly constituted board to ascertain their suitability for the managerial positions. 5. The management should implement a comprehensive policy on recruitment and a scheme of service to guide employment, promotions, transfers and grading of staff. 6. KBC Board should hire a Human Resource firm to harmonize and rationalize the staff and management structure at KBC. Following this harmonization, the artistes and casual staff at KBC should be given priority during recruitment, considering their high qualifications and experience. 7. The Board should review KBC’s policy on award of commissions to its staff and ensure that the permanent and pensionable members of staff do not draw any commissions whether from sales or revenue collections. 8. The KBC Board should conduct a thorough audit of the working conditions at KBC with a view to improving the same. 9. The Board should conduct an audit of all KBC assets. Moreover, KBC should move with speed to obtain all the title deeds of its land with a view of safeguarding the same against land grabbers and unscrupulous individuals. 10. The Board should establish internal mechanisms or channels of communication that encourage victims of sexual harassment to report such incidences whenever they arise. Further, a policy framework on sexual harassment should be formulated to ensure perpetrators are dealt with accordingly. 11. The Minister for Finance should take the necessary steps towards improving KBCs financial status including restructuring its balance sheet by converting KBC debt into equity. 12. The Government should increase its financial support to KBC to accelerate the process of restructuring and reforms and enable it effectively perform its role as a National public broadcaster. 13. The Government should as a matter of urgency negotiate with the Japanese government to write off the Japanese loan acquired for KBC in 1989 for the purchase of the Medium wave equipment which are obsolete. 14. The KBC board should establish an automated financial management system. 15. The Minister for Information and Communications should review the KBC Act Cap 131 in order to re-align it with the Constitution in particular Article 34 (4), to ensure that the National public broadcaster is independent and free from political influence. 16. The Government should upgrade the corporation’s equipment and studios to ensure that KBC has state of the art technology. 17. In order to protect the employees working at the transmission stations from exposure to spurious non-ionizing radiation, the Ministry of Public Health and Sanitation should fast track the enactment of the Radiation Protection Health and Safety Bill to repeal the radiation protection Act. Further, the board of KBC should immediately provide radiation safety gear to employees working with radiation equipment. 18. Security detail at KBC offices and stations should be enhanced to safeguard the premises from access by unauthorised individuals. 19. KBC should establish proper internal mechanisms to resolve disputes between employees and the management. 20. The return-to-work formula agreed between the management and staff should be honoured.

IFC and African Development Bank Sign ISDA Master Agreement to Expand Local Currency Finance

2012-06-04T01:57:00.004-07:00

IFC a member of the World Bank Group, and the African Development Bank (AfDB) today signed an ISDA Master Agreement to enter into cross-currency swap transactions to facilitate local currency lending and bond issuance in Africa. It is the first ISDA Master Agreement either institution has signed with another multilateral financial institution. The agreement will enable IFC and the AfDB to collaborate and benefit from each other’s local currency bond issues, enhancing their local currency funding capacity to support their clients’ development projects. Local-currency bond markets provide long-term, local currency finance for projects, protecting them from foreign exchange risks. These markets are a vital potential source of finance, particularly in the wake of the global financial crisis, when foreign capital inflows to Africa have diminished. Last year, the Group of 20 called for a concerted effort to develop and strengthen local currency bond markets in emerging markets. The agreement is the first step in an initiative for greater collaboration among multilateral institutions to accelerate local capital market development and increase local currency financing options. ”Expanding long-term currency initiatives is a cornerstone of IFC’s strategy to strengthen capital markets in developing countries,” said IFC Vice President and Treasurer, Jingdong Hua. “Helping to establish and strengthen such markets allows us to work with regulators and local institutions to ensure that capital market regulations are effective and entrepreneurs are able to grow and create jobs.” AfDB Vice President for Finance Charles Boamah said: “Promoting the development of local capital markets in Africa is paramount to successful, sustainable economic development. This agreement supports our African Financial Markets Initiative, which aims to further the development of domestic African capital markets, enlarge the investor base, and reduce African countries’ dependence on foreign currency denominated debt.” In Africa, IFC has issued local currency bonds in Morocco, the Western CFA zone, and the Central CFA zone, and has obtained approvals to issue local currency bonds in Kenya and Nigeria. Under its Pan-African Domestic Medium-Term Note Program, IFC is working with authorities in Botswana, Ghana, Kenya, South Africa, Uganda, and Zambia to obtain consent to issue local currency bonds. IFC is also working with eight members of the West African Economic and Monetary Union to establish local currency bond programs. Since 2007, IFC has committed more than $650 million in 17 different local African currencies through a combination of swaps, bonds, and structured finance products. For its part, since 2005 the AfDB has issued bonds denominated in or linked to the Botswana pula, Ghanaian cedi, Kenyan shilling, Nigerian naira, Tanzanian shilling, Ugandan shilling, and Zambian kwacha. The AfDB is also a regular issuer in South African rand (ZAR), its third largest lending currency. Since 2005, the AfDB has issued more than ZAR 25 billion in the ZAR domestic and Euro markets. The AfDB has also received authorizations to issue bonds denominated in the currencies of more than 15 African countries including, Cameroon, Egypt, Gabon, Mauritius and Senegal and is currently seeking authorizations from several more. The AfDB is currently in the process of launching in Uganda an inward listing off its Global Debt Medium Term Note Program. The Program will provide readily available local currency financing for the AfDB’s projects in the country. The first issue under the Note Program is expected in the coming weeks.

AfDB supports African SMEs with launch of African Guarantee Fund

2012-06-04T01:52:00.002-07:00

The president of the African Development Bank (AfDB)Donald Kaberuka, today announced the official launch of the African Guarantee Fund (AGF), a market-friendly guarantee scheme aims at easing access to finance for African small and medium-sized enterprises (SMEs). The announcement was made at the AfDB’s Annual Meetings, being held in Arusha, Tanzania. The AGF, designed and funded by the AfDB in partnership with the governments of Denmark and Spain, will provide financial guarantees to financial institutions to stimulate financing to SMEs and unlock their potential to deliver inclusive growth in the region. The AGF is a truly public-private partnership, with other donors, development finance institutions and private investors expected to join to provide additional capital and scale up its operations. SMEs are the best candidates to achieve inclusive growth in Africa as they contribute significantly to income generation and job creation. However, financial access is consistently reported as one of the major obstacles to SME’s growth and development. Only 20 percent of African SMEs have a line of credit from a financial institution. The AGF will help fill this gap. Opening the AGF Official Launch session, Mr Kaberuka praised the Danish and Spanish Governments for their continued support for the initiative, especially in times of fiscal austerity, and celebrated a two-year long successful partnership triggered by the Africa Commission’s recommendation in 2009 to implement the AGF as one of the initiatives to address youth unemployment in the continent. Mr Kaberuka said: “The African Development Bank is strongly committed to promote inclusive private sector-led growth and employment creation across the continent. Accordingly, it always looks at innovative and efficient modes of financing to reach out to SMEs. The AGF will contribute to rationalize the provision of financial guarantees for the purpose of mobilizing financial resources for SMEs. Likewise, the AGF will complement other Bank’s products and services for private sector development through SMEs.” He also urged the development community and the private sector to join the AGF and contribute to its success. During the session, which gathered together African and international entrepreneurs, representatives from banks, financial institutions, investment funds, central banks, and government agencies, the official AGF logo was unveiled and the AGF’s features and expected developmental impact on Africa presented.

KNOW HOW TO PICK TISSUE PAPER WITH THE BEST QUALITY

2012-05-28T01:13:00.000-07:00

Of all paper that is sued in our day to day activity tissue paper is unquestionably one that we cannot do without for all the hygienic purposes. And following disclosures last week that some of the tissue in the market Media 1st has decided to inform you of what qualities to look out for when buying tissue paper. Last week it emerged that some of the tissue paper in various retail outlets might not have met the global standards for tissue paper. According to manufacturers of the product the substandard tissue fails in meeting both the chemical and physical properties. The manufacturers say this could in turn affect the users skin meaning hundreds if not thousands of unsuspecting Kenyans could be at risk. This forced Media 1st to seek more information on properties to look out for when buying tissue paper. First is to analyze the uses of tissue paper. Tissue paper is used for maintain personal hygiene after taking a long call or urination. However, it can also be used for other purposes such as blowing one's nose when one has cold or absorbing common spills around the house. Another factor to consider is that whilst tissue is also used in pit latrines in most urban centers it is used in septic tanks hence must be designed to decompose inside septic tanks. In Kenya tissue paper in the market has two plies meaning it has 2 sheets although in other areas of the world tissue rolls have varying sizes from 1 to 3 sheets. The difference in sheets makes the tissue either bigger or smaller thus rolls with different number of sheets have difference in thickness, softness, strength and ability to absorb. Quality is usually determined by the number stacked sheets, coarseness, and durability. Low grade institutional toilet paper is typically of the lowest grade of paper, has only one or two plies, is very coarse and sometimes contains small amounts of embedded unbleached or unpulped paper. Mid-grade two ply is somewhat textured to provide some softness and is somewhat stronger. Premium toilet paper may have lotion and wax and has two to four plies of very finely pulped paper. If it is marketed as "luxury", it may be embossed, perfumed, colored or patterned, medicated with anti-bacterial chemicals, or even treated with aloe. In order to advance decomposition of the paper in septic tanks or drainage, use tissue with shorter fibers than facial tissue or writing paper. And so next time you pick up tissue choose tissue that meets up your needs and keeps the environment clean.

ICC Lawyers to Seek More Evidence on Kenya ICC Case

2012-05-27T09:50:00.000-07:00

Media 1st has learnt that the ICC sent lawyers and experts to Kenya two weeks ago to carry out a series of investigations on the post election violence cases that are now at the Hague based court. Events that have played out in the recent past including the admission by the ICC chief prosecutor Moreno Ocampo that the Kenya case can be delayed until the polls are conducted have revealed cracks in the prosecution evidence and plan. This is as in most cases, if the evidence provided holds ground and the judges find it substantial and sufficiently incriminating, then a hearing can be speedy and a judgment possible at the earliest convenience. Strategic Intelligence analyzed these events and possibilities and using very refined intelligence analysis doctrines found the prosecution led by Ocampo as feeling threatened by its poor evidence against the suspects particularly Mr Kenyatta. The lawyers will be in the country to conduct more investigations besides examine various sources of evidence and witnesses who provided previous evidence. Two scenarios are playing out with lack of credible witnesses and evidence becoming the dominant factor. The second scenario is to investigate previous sources of evidence and witnesses such as the KNHCR and NGO’s and authenticate their credibility as sources of prosecution witnesses and evidence.

Premier East Africa Outsourcing Summit in Nairobi

2012-05-22T07:01:00.002-07:00

Players in the East Africa business outsourcing sector will be meeting next month to chart new ways of driving the sector forward. The meeting to be held on 5th and 6th June will provide players with a platform to explore both the operational and technological issues affecting the sector earmarked as the flagship project for vision 2030. The event, will bring together senior executives from large customer based industries who will explore both operational and technological issues in the ***BPO/ITES (Business Process Outsourcing and IT Enabled Services) industry, while seeking to grow market share and profitability within the sector. The event is being hosted by the Kenya ICT Board and Kenya Information Technology and Outsourcing Society (KITOS) in partnership with international business-to-business conferencing company, Kinetic Events. The 2-day event will be flagged off by Dr Bitange Ndemo, the PS, Ministry of Information and Communication, while Kenya ICT board CEO, Mr Paul Kukubo will give the keynote address. Other guest speakers include, Pravin Kumar, Global CEO, Spanco BPO, Tejpal Bedi, chairman KITOS, Mugo Kibati Vision 2030 Executive Director, Gilda Odera, Prime Minister, Working Group-BPO/ITES and Julius Opio, Head of East and North Africa Region, SEACOM. Among the many organisations represented are Kenya Airways, Technobrain, World Bank, Cayman Consults (Uganda), Strathmore University and Zensar Technologies. The Kenya Revenue Authority, IT Authority (Uganda), Australian BPO Association, KCB, PAYNET, CIC insurance will also be among the many slotted speakers in the thought-provoking sessions. Attendees at the event will engage in interactive conference sessions and educational workshops designed for quality time and interaction with peers exploring the alignment of people, process and technology. The summit aims to offer insight into the solutions available to BPO/ITES industry today, assisting companies in the negotiations and selecting the tools best suited to their needs.

CO-OPERATIVES URGED TO SEEK ALTERNATIVE FINANCIERS

2012-05-22T07:00:00.000-07:00

There is need for co-operative societies to seek alternative financing options apart from banks that are currently charging high interest rates. According to head of financial services at Apex consulting George Njoroge co-operatives must start seeking finances externally through direct borrowing or through partnering with international institutions if they are to achieve their mandate of extending credit services to over 12 million members. The co-operative movement in Kenya consists of 13,000 registered co-operatives 6000 of which offer savings and credit services. As a result of its wide reach throughout the country the movement is highly capitalized with a share capital of Kshs.260 billion, total deposits of 240 billion and a loan portfolio of over 200 billion. The movement thus controls over 30% of the gross national savings and 45% of GDP. However the co-operatives also face heavy demands of credit from its 12 million members most of whom are in the agricultural sector mostly for inputs and value addition. But with just around 140 billion shillings in withdrawable deposits this is not enough. As a result the movement has resulted to sourcing funds from financing institutions such as banks which are currently charging rates of above 20% despite the onward lending by SACCOs rate of 12%. It is thus that the 1st summit for African SACCOs and Co-operatives has the primary theme of alternative financing from the current commercial and traditional sources. this is putting in mind that Kenya has a limited local supply of finance with the local capacity at 120 billion against an absorption rate of 280 billion. The organizers of the conference also hopes that Kenya can showcase itself a regional benchmark in a year set aside as the year for co-operatives.

South Sudan Acquires Anti-Aircraft Defense Systems

2012-05-21T09:21:00.001-07:00

Posted by David Goldman | Intelligence News, Military Intelligence months of aerial battering by the Sudanese airforce, Southern Sudan has started the process of upping its air defenses by the acquisition of anti-aircraft missile systems. Strategic Intelligence confirms that South Sudan is acquiring anti-aircraft missiles to defend its territory from unspecified sellers probably the United States or Israel. These can be transported through Kenya and negotiated through Kenya, intelligence shows. The United States has been arming and financing the South Sudanese army. Since the independence of South Sudan, Khartoum has continued bombing oil facilities, infrastructure, and business resources in South Sudan, intelligence reports show. According to head of South Sudan’s army (SPLA) James Hoth Mai, the SPLA is poised to acquire anti-aircraft missiles after the dire need to protect the country from aerial bombardment increased. Former U.S. special envoy to Sudan, Andrew Natsios has been negotiating with United States government to provide arms, particularly the American anti-aircraft weapons to the South Sudan army. Acquiring anti-aircraft weapons will strengthen the South Sudanese army against the better armed Sudan military This comes even as reports emerge indicating that South Sudan 4th Infantry Division/Brigade fell Sudan Airforce MIG-29 jets used to bomb the border area besides baby-blue unmanned spy plane. The intelligence has been confirmed by SPLA commanders and intelligence advisers near the oil town of Heglig, Tachuien, and Bentiu where the SPLA forces moved through when attacking Sudan. The presence of Iranian spy planes could signal a proxy war between Iran and Israel which has advisers and military trainers in South Sudan besides American military experts. According to South Sudan army commanders, the war is just beginning, the rains have helped stymie the war with tanks and vehicles unable to move, but once the rains subside, they will make an advance. Foxholes and trenches have been dug signaling the determination to keep Southern Sudan off the grip of Sudan. South Sudan oil production has been shut besides Sudan saying none of the oil will be piped through its territory until all disputes are solved. Source: http://intelligencebriefs.com

Agency Microfinance agents set for June

2012-05-21T05:02:00.003-07:00

Deposit taking microfinance institutions will from June have agencies after central bank published guidelines on the opening, relocation and closure of marketing agencies and agencies. Central bank says the guidelines will increase financial services outreach in a cost effective manner especially to the unbanked without risking the safety and soundness of the financial system. Last week central bank published the Guideline on the Opening, Relocation and Closure of Marketing Offices and Agencies of Deposit Taking Microfinance Institutions. This is the 1st indication that deposit taking microfinance institutions could soon open outlets in far flung areas through third party premises. The guidelines will affect the 6 deposit taking microfinance organizations namely Faulu Kenya, REMU, Rafiki, SMEP, Uwezo and the Kenya women finance trust. The guidelines charge the board of directors of the various DTM’s with the responsibility of formulating policies, procedures and guidelines. The guidelines according to central bank should ensure that suitable lease agreements are in place, ensure sufficient facilities are in place to enable efficient provision of DTM services, ensure risks associated with carrying out deposit taking business in marketing offices or agencies are properly identified, documented and mitigated and Business activities carried out in marketing offices or agencies are constantly monitored to ensure compliance with the Microfinance Act, Regulations, this Guideline and any agreement in place. The guidelines continue that all firms wishing to participate as agencies will have to apply with the regulator with CBK replying within 30 days where it declines to approve. Those granted the approval will be expected to open shop in 90 days. The agencies will further be expected to renew licenses annually. Key responsibilities will include of the agencies and marketing institutions include maintaining an effective system of internal control. The guidelines are expected to be effective starting June 2012 according to the director of bank supervision department.

Why misspelled names are so common & what journalists are doing to prevent them

2012-05-21T04:57:00.003-07:00

by Mallary Jean Tenore Published May 21, 2012 6:48 am Updated May 21, 2012 7:12 am Warren Buffett, Michele Bachmann and Elliott Gould all have something in common: they know what it’s like to have journalists repeatedly misspell their names. News organizations frequently run corrections for misspelled names, and some have misspelled the same name dozens of times. Last week, the Los Angeles Times ran a correction after misspelling Gould’s name in a caption. That was the 47th time since 1985 that the Times has referred to the actor as “Elliot” instead of “Elliott.” Henry Fuhrmann, assistant managing editor for the copy desks and standards at the Los Angeles Times, said that of 500 or so corrections published this year, about 14 percent have been for misspelled names. This is similar to other news organizations; in 2011, about 20 percent of the Toronto Star’s corrections were name-related, while about 16 percent of The New York Times’ were. It’s so easy to check the spelling of names — especially those of famous people — and yet we often fail to take this extra step as journalists. We forget to ask for the right spelling, we write the name from memory, we misread our handwritten notes, we’re misled by incorrect sources online, or we assume a name is spelled the “normal way.” Other times, we confuse people with similar-sounding names — like when journalists reporting on Osama bin Laden’s death last year referred to him as “Obama.” How the issue is playing out at news sites Jesse Lewis, multiplatform editing chief at The Washington Post, said misspellings at the Post typically occur when sources have common names with unusual spellings — Clark v. Clarke, for example, or Jimi v. Jimmy. “In these cases, the error tends to take place when reporters get names and spellings from other people,” Lewis said via email. He noted that in other instances, spelling issues occur with foreign names. This is especially true with names that are spelled differently by different publications, such as Moammar Gaddafi. Slate has also posted a lot of corrections for common names with unusual spellings. Home Page Editor Chad Lorenz said the site has fudged Michele Bachmann’s name numerous times — spelling it with two L’s instead of one and her last name with one N instead of two. The site has misspelled Sen. Jon Kyl’s name multiple times as well. Earlier this month, Slate misspelled three names in one week — Kanye West, H.L. Mencken and Edgar Allan Poe. (Poe’s middle name is commonly misspelled.) That same week, Slate referred to Sen. Ron Johnson as Tim Johnson and U.K. chancellor George Osborne as David Osborne. “Reporters here do understand the importance of proper spellings and work hard to avoid misspellings, so I don’t need to lecture them on it,” said Lorenz, who helps oversee Slate’s corrections. “They hate misspellings as much as or more than I do. Probably more.” He estimates that Slate has written five or six corrections for misspelled names each month this year. While he doesn’t excuse it, Lorenz understands why journalists get names wrong. “In general, journalists probably misspell names because they are focused on other, more mentally demanding facts: understanding the way a piece of legislation works or the legislative process behind it; checking the math behind a series of statistics; checking that quotes are right; researching the historical facts of a given topic,” Lorenz said via email. “Those demands are then compounded by the time pressures of reporting and writing very quickly.” It doesn’t help that newsrooms have let go of so many copy editors in recent years. How misspelled names damage our credibility When Starbucks employees misspell our names, it’s funny. When journalists do, it’s frustrating. Our name is tied to our identity, so we feel slighted when people don’t take the time to spell it right. This is especially true when people we know spell our name wrong. I cringed when The Wall Street Journal misspelled one of its own reporters’ names in a byline. Of course, I’ve been guilty of misspelling names, and so has Poynter.org. Of the 60 corrections we’ve run this year, about 16 percent have been for misspelled names. I’m especially sensitive to the issue because my name is commonly misspelled. My parents loved the show “Family Ties” and named me after one of the main characters, Mallory Keaton. Hoping to make my name sound more feminine, they spelled it with two A’s instead of the more common spelling (one A, one O.) Ever since, people have referred to me as “Mallory,” “Mallery,” “Malory” “Malary,” and yes, sometimes even “Melanie.” I let journalists know when they’ve gotten my name wrong in stories. More often than not, I’ve found that they fix the spelling but don’t write a correction. When we misspell names and don’t write corrections acknowledging our mistakes, we chip away at our credibility (which isn’t that high to begin with). Our audience may begin to wonder what other facts we’ve gotten wrong, or think we’re trying to hide our errors. Phil Corbett, assistant managing editor for standards at The New York Times, alluded to this in a blog post last November. “It’s embarrassing when we misspell well-known names. Even worse is misspelling the names of ordinary people who may appear in the Times only once,” he wrote. “Their moment in the spotlight is spoiled, and they’re likely to tell everyone they know that the Times can’t get its facts straight.” Corbett said that 460 of the estimated 2,800 errors the Times corrected in print from January to November 2011 involved people’s names. That’s about 42 misspellings per month. Corbett didn’t have more recent figures to share when I reached out to him, but said the number of misspellings has remained more or less consistent. What’s being done to avoid misspellings Some news organizations have taken new steps to safeguard against misspelled names. The New York Times recently started using a new spell-check system that is integrated into its content management system, in hopes it will make reporters more aware of misspellings. “It’s much better at reading context and entire phrases, so it knows that ‘buffet’ is a legitimate spelling, but that ‘Warren E. Buffet’ is almost certainly an error,” Corbett told me, noting that Warren Buffett is one of the names the Times regularly misspells. “[The system] takes into account The Times’ stylebook; it uses our newsroom dictionary, Webster’s New World College; and it makes it easy for editors in the newsroom to quickly add new terms to the spell-check dictionary, for example a new name that suddenly crops up in the news.” Additionally, Greg Brock — who oversees the Times’ corrections process — has started working more closely with editors who use a lot of freelancers. The goal, Corbett said, is to emphasize the need for freelancers to act as their own fact-checkers and double- and triple-check the spelling of names. Editors can play an important role in reminding journalists to be more careful when spelling names. Former Washington Post Executive Editor Ben Bradlee had this to say to a young man who referred to him incorrectly when asking for a job in 1978: “Even though you are still young, very young, let me give you some advice. When you write the editor of a newspaper for a job, other things being equal, you stand a better shot if you spell his name right.” The Los Angeles Times’ Fuhrmann shares this advice with reporters: “Unless it’s the president or your mother, always look [names] up. And even then, always double-check your typing. With search engines at our fingertips, there really is little excuse for not taking that extra step.” Fuhrmann suggests copying and pasting names rather than typing them out, and has found it beneficial to add hyperlinks to names in stories. “Linking to the official bio or website of a newsmaker or organization — a useful but under-employed technique for informing readers — compels the reporter or editor to see and read the name as rendered by a reliable source,” he said. Using accuracy checklists can also help. As my colleague Craig Silverman once told me, “One of the key things about accuracy is that it’s a learned behavior. If you create habits that reinforce accuracy, then your chances of making an error are greatly reduced.” Some journalism schools are trying to reinforce the importance of accuracy by lowering students’ grades when they misspell names. I learned this after a University of Iowa student spelled my name incorrectly in a final project for her Gender and Mass Media class last winter. Her professor, Pam Creedon, lowered her grade from an A to a B as a result. When students misspell a name in classes that are open only to journalism majors, Creedon gives them a zero. Ultimately, she wants to stress the value of spelling names right and of showing your readers that you care. “[When] a family member, next door neighbor, friend, classmate or anyone sees a name misspelled in the media, everyone has a story to tell about when it happened to them,” Creedon said via email. “Sure, if the misspelling happens online these days, it can be corrected fairly easily. But, the memory of a misspelling never leaves.”

HUGE GAS POTENTIAL IN EAST AFRICA

2012-05-21T01:04:00.005-07:00

The east African region is set to join the worlds gas giants with last week’s announcement of gas finds in Mozambique and Tanzania. These discoveries have pushed exploration to a new height with projections from the U.S. Geological Survey estimating 253 trillion cubic feet of gas may lie off Kenya, Tanzania and Mozambique bigger than Africa's biggest energy producer Nigeria which has 186 trillion cubic feet. East Africa has turned to a hotspot for exploration of gas and oil with positive findings of gas in Tanzania, Mozambique and Rwanda while oil has been found in Uganda and Kenya. It is however the gas find that is hitting the scenes with the regions potential far above the oil finds. In Mozambique alone geologist from Anadarko petroleum estimate could have close to 1.4 trillion cubic meters or 50 trillion cubic feet of gas almost as much as Libya’s known reserves. Italian oil group Eni that is carrying out exploration in a neighbouring block estimates even higher reserves of about 52 cubic feet. In Tanzania British gas firm BG Group and explorer Ophir Energy last week said they had found more gas off the coast of Tanzania, raising hopes that the East African country will become a major new gas province. The estimated 3.5 trillion cubic feet is on top of the earlier find of 15 trillion cubic feet of reserves with a potential upside in total find. And although Kenya has not yet positively striked natural gas the positive find in the east African coast has driven up hopes that the entire region could have sufficient quantities. This is on top of the oil deposits find by British firm Tullow oil in Kenya and Uganda which although significant are far below reserves in West Africa. Oil finds in Somalia and Somaliland also project hopes for the region. Estimates of Somalia's reserves, onshore and offshore, go as high as 110 billion barrels of oil. According to analysts good use of the reserves could yield up to 10 billion dollars annually in taxes for the region.

Swiss Clariant Oil services seeks Kenyan Partner

2012-05-15T07:22:00.004-07:00

Swiss owned multinational oil services company Clariant is seeking to enter the Kenyan market through a local partner. Head of oil services in Africa Nick Kenlay has told media 1st that talks are in the early stages with a local subsidiary of KEMIA international a pharmaceutical and chemistry company, with hopes to forge a partnership and establish contact years before oil production starts. This follows continued success in the exploration of oil in Turkana by British firm Tullow and now this optimism has attracted renewed interest in the country with the newest entrant being the Swiss Multinational Clariant Oil and mining services. According to the company’s head of Africa the multinational is in the process of getting a local partner that will enable it gain entrance into the market and that will further enable the company to start production of the necessary chemicals needed for oil production should the exploration bear fruit. Among benefits that the partnership could bring include much needed training in the sector with Clariant saying the country lacks the needed chemist, chemical and petroleum engineers. The company that specializes in maximizing and reducing cost in production says its presence will also result to research into the needed chemicals as an outcome of tests on quality of oil, water salt and gas levels in the oil currently ongoing. KEMIA is in the short term expected to act as the legal operating entity. Clariant also says it will be entering into partnerships with other local entities especially in logistics to ensure constant uninterrupted flow of inputs and needed chemicals once a local subsidiary is created. It is however unclear the kind of partnership Clariant is seeking from kenya's KEMIA. Should the talks succeed Kenya will join the likes of Angola, Nigeria, Sudan, South Sudan, Uganda, Libya, Ethiopia and Namibia where the firm has a presence.

SUBMARINE CABLE CUTS FORCES TEAMS TO LAY NEW RESTORATION CABLE

2012-05-10T05:11:00.001-07:00

The east African marine cable TEAMS, has announced that it will be lay a cable to connect Mombasa to Djibouti as a restoration cable. According to TEAMS cable general manager Joel Tanui the cable will result to better restoration with little latency while at the same time offer cheaper rates. This follows a series of submarine cable cuts mostly as a result of shipping activities “The restoration cable will be connecting Mombasa via land through Ethiopia to Djibouti to minimize cases of outages while providing the best quality service.” Joel Tanui, General Manager TEAMS. Tanui says the route has been chosen after deliberations on which route would provide the lowest delays while at the same time giving the best onward connectivity. TEAMS has said that the cost of rerouting through Mombasa has proved expensive while Djibouti offers less latency and a better onward connectivity as most cables rerouting to Europe pass by the Horn of Africa state. The cable to be laid by the Kenyan transmission cable laying company KENTRACO will involve using electric infrastructure to lay the cable instead of laying underground cables.The work is expected to begin once funds are sourced either from the universal service fund through the Communication Commission of Kenya or through other shareholders. This announcement comes even as the cable continues to experience outage forcing it re reroute following a cable cut on the 26 of April just after suffering another in March where a ship carrying out dredging works at the Mombasa port. The new line will also locally connect Nanyuki to Moyale.. In the meantime the company says it has interim plans that will see partners provide stable links between the two towns before a line is complete in 6 months. Tanui says the new line is also part of the company’s strategy as it targets Somalia in the near future and expects the line to Djibouti be complete in between 24 to 36 months.

GIBE III DAM CONSTRUCTION SEES INCREASED RESISTANCE

2012-05-02T03:22:00.001-07:00

Environmentalists and stakeholders in the tourism sector have continued to sound alarm over the controversial Ethiopian dam under construction on the lower part of river Omo. According to the stakeholders the damming will cost the Kenyan economy billions as the lake recedes over 50 kilometers affecting breeding sites for fish and crocodiles as well as Flora and Fauna at the Sibiloi national park. Several world heritage sites are also threatened. It is a project that will benefit both Kenya and Ethiopia supplying much needed energy for the industrialization of the 2 countries. The Gibe 3 hydroelectricity dam that is 243m high will be the largest hydroelectric plant in Africa with a power output of about 1870 MW of which 500MW will benefit Kenya under a power purchase agreement. However this dam poses far reaching dangers to the population as well as the flora and fauna dependent on Lake Turkana. With environmentalist projecting that the lake could recede by up to 50 kilometers. “We foresee a lot of conflicts in future as the neighbouring communities fight for water” Abdulkarim Mohammed, Curator at the Koobi Fora Museum. The area around Lake Turkana is known as the cradle of mankind following the numerous discoveries of the ancient man. Apart from the danger on the sites Sibiloi national park which is largely dependent on the lake for watering of the wild animals could also lose its capability to support its diverse wildlife. “This is also the breeding site for crocodiles and fish and supports the Gravy zebra, Oryx, Leopards and many birds,” Abdulkarim Mohammed, Curator at the Koobi Fora Museum. And with the Kenyan government having maintained its silence over the matter with reports that the national environment management agency might have never carried out an analysis the stakeholders have turned to the United Nations educational, scientific and cultural organization’s for intervention. But with the project just months away from commissioning, the sun might soon be setting on man’s original home, Lake Turkana taking with it many species as collateral damage as the region industrializes.

KTB urges the corporate sector to embrace tourism

2012-04-20T06:10:00.001-07:00

The Kenya tourism board has urged corporates to inculcate the culture of tourism among its staff as the organization tries to improve domestic tourism numbers. Speaking during a flag off ceremony for Barclay’s business club members enroute to Amboseli KTB managing director Muriithi Ndegwa noted that domestic tourism contributes only about 30 billion shillings to the sector and is urging companies to even consider giving staff paid holidays as an incentive.
While recognizing that domestic tourism has come a long way in the past few years the Kenya tourism board says the private sector is still not doing enough to contribute to the sector.
Citing countries like South korea where corporations offer their staff paid holidays as a motivator to encourage them to work harder.
Muriithi says the domestic market contributed only 30%of the 97.7b shillings the sector raked in last year a figure he believes can increase with the private sector playing its part.
He also encouraged Kenyans to sample the diversity of the industry even as the regional market mostly the east African community continue to supplement domestic tourism.
Barclays CEO encouraged entrepreneurs to enjoy the serenity in various lodges saying this will offer much needed moment for reflection and innovation. They were speaking while they flagged off 400 Barclays business club members off to Amboseli national park part of the company’s strategy to help bring together its members and help them create business links.

Sudan oil-war spiral could split world powers

2012-04-19T06:38:00.000-07:00

COURTESY:Elena Ostroumova, RT
Sudan's president has threatened to topple the government to his south to “liberate” the South Sudanese. As a bloody battle over a disputed oil field heads towards full-scale war, it threatens to provoke conflict between the US and Russia and China.

Wednesday, Sudanese President Omar al-Bashir accused the government in the South Sudanese capital, Juba, of trying to topple his government and vowed to retaliate.

“This situation makes it imperative for Sudan to confront the challenge of the State of South Sudan to topple the government in Khartoum by working to liberate the Southern nationals,” al-Bashir said.

South Sudan broke away from Sudan last July after decades of on-off civil war. But the two never agreed on how to share the oil wealth found in the region between the countries, and the border was never fully demarcated.

The fighting is taking place along the shared border around the oil town of Heglig, which South Sudanese troops captured last week.

Sudan’s parliament was quick to brand its neighbor an “enemy” and called for the swift recapture of the region.

The Heglig field is vital to Sudan’s economy as it accounted for half the 115,000 barrels per day output that remained in its control when South Sudan seceded in July and Khartoum lost 75 per cent of the country’s oil production.

In its turn, the landlocked South lost its 350,000 barrels per day output after failing to agree on how much it should pay to export via Sudan’s pipelines, a Red Sea port and other facilities.

Fighting over oil transit payments and disputed territory has already withered the combined crude output of both countries, which are highly dependent on oil. Any protracted fighting would severely damage their economies and may disrupt the surrounding region.
Fueling an arms race

The international community is calling to stop the bloodshed, but Sudan and South Sudan seem determined to resolve the issue by force.

Meanwhile, their “border war” threatens to provoke a conflict among the permanent members of UN Security Council. South Sudan is an ally of the US, while Khartoum has close ties with Russia and China.

“If the conflict escalates, we are likely to see a stalemate at the UNSC with China and Russia opposing any proposals that may be politically costly to Sudan,” political author and columnist Reason Wafawarova told RT. “The US, with its allies France and the UK, is likely to push for proposals politically favorable to South Sudan, while opposing any proposals they may see as benefiting Sudan.”

Wafawarova says Sudan is seen as militarily superior to South Sudan. The US is unlikely to allow Juba’s capitulation, increasing its military support.

Some reports allege that the West is already providing arms to South Sudan through its Middle Eastern partners. For instance, Sudan’s Al-Intibaha newspaper writes that Israel might be supplying weapons to Juba.
South talking tough too

Another indicator that Juba has some serious allies in the West is the tough stance of South Sudan’s president, Salva Kiir.

When the UN Secretary General Ban Ki-moon called him and asked to stop the attack on Heglig, he received a surprisingly defiant answer: “I am not a slave to fulfill your orders!”

Experts say the behavior of President Kiir may be explained by the fact that he was confident of the unshakable support of the United States. Previously the US helped the southerners in their fight against the “dictatorial regime in Khartoum.”

The reason, Wafawarova says, is that it is no secret the United States militarily supported South Sudan in its campaign for secession from the North.

The US reportedly provided $100 million-a-year in military assistance to the SPLA. The information about the nature of this assistance has been scarce, but in December 2009 WikiLeaks released a diplomatic cable that refers to a US “training program for the SPLA, including combat arms soldier training.”

On the other side are Russia and China, who have traditionally supported close ties with Khartoum, selling weapons to Sudan right up to the 2005 UN arms embargo on the Sudanese government because of the war in Darfur.

However, in 2008 a BBC news report claimed to have found evidence of China-Sudan trade in violation of the embargo.

Currently, China is Sudan’s largest trading partner, importing oil and exporting low-cost goods.

Wafawarova believes that the permanent USNC council members’ standoff in the region may lead to an arms race between the two Sudans. US will be “expanding the military strength of South Sudan, while China and Russia will keep arming Khartoum,” he said.

There are also persistent rumors that the US plans to set up a military base in South Sudan – the largest in Africa.

“The US has failed to set up its AFRICOM base in Ghana, Mozambique, Uganda, Kenya and other proposed countries in the past,” says Wafawarova. “It would not be surprising if the US is trying to capitalize on the vulnerability of South Sudan in its efforts to establish the AFRICOM base somewhere in sub-Saharan Africa.”

However, Wafawarova stressed that any efforts to set up AFRICOM in South Sudan are likely to face stiff opposition from Russia and China, as well as from the African Union and most African countries at individual levels.
Shifting the blame

While all involved in the conflict are pursuing their own interests, there always has to be someone to blame. It seems that Russia and China might again become the punching bag of the West for this purpose.

One of the indicators that that this might be the case is Amnesty International’s shift of attitude towards the parties involved. In July 2011, the organization accused China, Russia, and the USA of fueling conflict in the region.

The organization condemned the countries “for providing weapons or military training to the Sudanese Armed Forces (SAF) and the Sudan People’s Liberation Army (SPLA), the official army of South Sudan.”

However, in February 2012, only China and Russia were accused of supplying arms to the volatile region, with no traces of US involvement whatsoever.

“China, Russia, and Belarus continue to supply weapons and munitions to Sudan despite compelling evidence that the arms will be used against civilians in Darfur,” the new Amnesty International statement reads.

Tuesday, Security Council members promised to discuss the crisis urgently, including the possibility of sanctions.

“Calls from the UNSC for a ceasefire are hypocritical and of no strength for as long as China, the US and Russia are pursuing their own political and economic interests in Sudan,” believes Reason Wafawarova. “And the fact that Heglig is, in reality, a conflict over oil makes the prospect of an amicable solution bleak.”