Genesis of Kibaki-Gaddafi deals

It all began in 2001 ahead of 2002 General Election.
Then President Daniel Moi was facing unprecedented challenge to his 24-years leadership and the future of Kanu, the party he had led with an iron grip for decades, seemed uncertain. The opposition, led by its Leader in parliament (Emilio) Mwai Kibaki, was divided more than ever. Kibaki together with the late Vice-President Michael Kijana Wamalwa and current Water minister Charity Ngilu were fronting for a united opposition while Raila was edging closer to Moi in what culminated into a political merger. Raila dissolved his party (National Development Party) and joined Kanu as its Secretary-General.

But the marriage was short-lived. Raila left Kanu and teamed up with Kibaki’s National Alliance Party of Kenya (NAK) to form National Rainbow Coalition (Narc), which ended Kanu’s 40-years grip on power.

Realizing that the tide of change was almost inevitable, Moi opened the floodgates of money. The opposition retaliated by embarking on a global campaign to raise funds for purposes of the presidential election. The opposition chiefs began knocking at the doors of every regime they felt was at odds with Moi. That’s how Kibaki landed in Tripoli.

Gaddafi had fallen out with Moi during the cold-war era. The Libyan embassy was by then said to be carrying out espionage activities in Kenya. Gaddafi was heavily accused by Moi of giving Kenyan dissidents a safe haven to carry out their activities.

In 2002, Kibaki and Raila went to Tripoli and secured millions of oil money to fund their campaign. In return, they promised Gaddafi, investment opportunities in strategic areas upon taking over power. In fact, Kibaki’s nephew, Alex Muriithi who passed away late last year, was sent in confidence to sign the deal(s) on behalf of Kibaki.

It is soon after January 2003 that Libyans began making in-roads in Kenya’s corporate world. The matters were helped by the fact that Ugandan President Yoweri Kaguta Museveni - who has a long known association with Gaddafi - seemed to enjoy cordial relations with the new Kenyan President. Since then Kibaki, Gaddafi and Museveni have met on three different occasions in Kampala and Tripoli.

But Raila - who was a major player in securing the Libyan deals - soon fell out with Kibaki over matters political. A clique close to the first family, popularly known as the Muthaiga golf buddies, quickly monopolized the Government and in essence the deals. This prompted bad blood between Raila camp and Kibaki side. There was the feeling that a group of Kenyans from a certain region seemed to hold onto the notion that they were the only ones with the right to “eat”.
This bad blood will continue as long as the Kibaki clique accepts to “eat” with the rest!

Ends…

Deals PNU must approach "very" cautiously

Members of the new Grand Coalition Government seemed to work in tandem until the recent emergence of details that Grand Regency Hotel has been sold. It all started with the Central Bank of Kenya (CBK), announcing in a formal occasion, that business tycoon, Bro. Paul Kamlesh Mansukural Damji Pattni had surrendered the hotel to CBK in exchange of amnesty from criminal charges by Kenya Anti-Corruption Commission (KACC). Later on news started spilling out that the prestigious 5-star hotel had, in fact, been sold to an investment firm owned by the Libyan Government. Finance minister Amos Kimunya and CBK Governor kept on denying the allegations of any sale until maverick Ugenya legislator and Lands minister James Orengo broke the news that the Government had sold the hotel and the parties involved were just waiting for the D-day to hand-over the coveted asset to Tripoli.

Hell has since broken lose and the twists and turns surrounding the scam could just be the “beginning of the end” of Kimunya’s stint in the Cabinet. If he falls, he will be following in the footsteps of his predecessor David Mwiraria who was forced to resign at the height of Anglo-Leasing scandal. Others who have met a similar fate while serving at the treasury include former VP and current Internal Security minister Prof. George Saitoti who was at the helm of the Finance ministry when Goldenberg scandal - Pattni is said to have bought Grand Regency Hotel out of the proceedings of the multi-billion scandal - took place.

But this is just one deal among many other lucrative ones that the Government (read PNU/State House) has entered into.

Top among these deals is the multi-billion contracts on the extension of Mombasa-Kampala oil pipeline and the sale of Kenya Petroleum Refinery Limited (KPRL) in Mombasa. The two have already been offered to the Libyan Government. The transaction to award Tamoil of Libya the contract to build the Eldoret - Kampala section of the pipeline was arrived at on December, 21, 2007 at Nyayo House, the Hq of Energy ministry. The pact was followed by the signing of agreement by Kenya’s Energy minister Kiraitu Murungi and his Ugandan counterpart Daudi Migereko on 22^nd January, 2008. The lucrative deal estimated at Ksh6.2 billion (USD100 million) is crafted on concession arrangement. The Libyans are not through yet! In November last year, Libya Oil, popularly known as OilLibya, completed the acquisition of the assets of Exxon-Mobil, which was closing down its African investments. OilLibya is the Kenyan subsidiary of Tamoil Africa Holdings Limited (TAHL), itself a part of Libyan-African Investment Portfolio (LAP) – the investment arm of the Libyan Government. Tamoil similarly won the tender to buy Kenya Petroleum Refineries Limited (KPRL) in Mombasa. The refinery, the only of its kind in the region is owned by Government of Kenya (GoK) 50%, Shell International 17.1%, British Petroleum (BP) 17.1% and Chevron (formerly Caltex) 15.8%.

Last year, the Libyan Government extended a Ksh21 billion debt to GoK to finance the upgrade of KPRL and put up a Liquefied Petroleum Gas (LPG) facility. The award of the tender has already triggered a war with Indian oil giant Reliance Industries Limited (RIL), which is said to be eyeing a stake in the refinery after it bought out Gapco Group, a regional oil marketer. Gapco is partly owned by Prime Minister Raila Odinga through his Specter International Limited (SIL).

Early this month, Energy PS Patrick Nyoike announced that GoK was in the process of buying into the assets of Chevron (Caltex Kenya) Ksh3 billion. But sources within the industry say a silent “deal” is being worked on with OilLibya - which is also bidding for the same business – for the GoK to withdraw in favor of the Tripoli-based company.

Likewise, transactions touching on the sale or transfer of property, land especially, owned by National Social Security Fund (NSSF) must be handled very carefully. Much of the land owned by the giant social security fund was acquired in 1990’s in controversial circumstances and their disposals have - most of the time - ended in court. Libyan-African Investment Portfolio (LAP) which bought Grand Regency Hotel has equally bought a prime piece of land opposite the entrance of the Hotel in which it is said to be in the process of building another hotel-cum-shopping mall. Prestigious buildings within the CBD owned by NSSF namely; Hazina Towers, View Park Towers, and Hazina Centre (housing Nakumatt Lifestyle) are all up on sale at below the market-rates, analysts say.

Deals on the sale of public companies through Initial Public Offers (IPOs) must also be above reproach. Why? Kenyans no longer view the stock market as a business opportunity but rather a con-game where the die is cast. For instance, the real owners of Mobitelea, said to own 10% of Safaricom remains unknown. Mobitelea is allegedly owned by former president Daniel Moi and his associates as well as clique of wealthy British technocrats. No wonder the British Government did little in its attempt to investigate on the real owners of the mysterious firm.

Freebies

Talk is rife that Kimunya and Kibaki might have received an oil tanker as a gift from Gaddafi. The ship is said to have docked at the Mombasa port a month ago in the name of a company owned by the family of the former kingpin of Coast politics, the late Karisa Maitha. Maitha, a flamboyant politician indeed, was a close and trusted ally of President Kibaki.

Kimunya, his boss President Kibaki/First Family and their allies must walk cautiously on these deals, especially now that they are in a (forced) political marriage with strange bed-fellows. ODM prides itself of very astute technocrats as well as politicians with a wide network both in the Government and corporate world. James Orengo (Lands), Otieno Kajwang’ (Immigration) and William Ruto (Agriculture) are some politicians one would dread to serve with in the same Cabinet.
Ends…