Monday, 18 March 2019

WHEN LUXURIES BECOME NECESSITIES


We’re all susceptible to inflating our expenses, and it’s especially hard to ignore once we get used to a lot of these “finer things” in life. Even if they don’t seem like “luxuries” anymore!
You wanna see what they are?
Of course, you do:
  1. Smartphones. The biggest culprit of all! A decade ago I was just fine calling and texting around with my friends, and now if I go an hour without swiping on it then I have a minor heart murmur! I may just need to check into a psychiatric den.
  2. Laptops. A bit more productive than the above, but I’m still very much attached to it more so than I’d like (if only you didn’t need a computer for blogging!).
  3. Internet. The bad boy that connects our entire lives!! You literally disconnect from this one thing and your entire world is blocked out – and wallet expands overnight. Screw Netflix and YouTube! Lol!
  4. Coffee shops. Remember the time before Javas or Starbucks, etc? ME NEITHER! Because that was NO LIFE without coffee on every corner!! It’s a freaking addiction…. And please don’t mention beer here!
  5. Cars. Believe it or not, there was also a time where people walked distances currently unimaginable. Right now you just “Taxify” or “Uber” yourself to point B with the tap of a button. Cab hailing Apps are on each of sin 1 and 3 above!
Best to just never try anything fun so you never have to worry about getting hooked, haha… At least that’s my reasoning for staying away from hard drugs and weed my entire life.
I take one swig of booze and puff of ganja and get hooked on both on the spot! Ain’t no way I’m trying anything else and forever knowing the difference? Damn!
PSST:
Not everything we spend our money on is bad, of course, but if you don’t know why you’re still spending the way you are, it might make for a good opportunity to reassess and get back to the basics again. And good luck with that!
So, lets have some fun on this;

What are some of the luxuries you’re now accustomed to that you weren’t even aware of?

Thursday, 14 March 2019

THE RED FLAGS OF PROCUREMENT FRAUD

Procurement fraud is not difficult to spot. Chances are you have witnessed potential signs of procurement fraud in everyday working life, so look out for potential ‘red flags’.
It should be noted red flags below are only an indicator there may be issues or concern, but doesn’t necessarily mean there is fraud. 
A.   BID RIGGING
1)     Identical bids, different bidders. The bids submitted by different contractors contain the same line items or the same bid.
2)     Higher cost. All bids are higher than the projected cost and prices
3)     Rewarded bid losers: Subcontracting losing bidders with or without the client’s knowledge.
4)     Tampering of bids. Physical alteration in one or more bids especially during the last minutes or after submissions.
5)     Anomalous cost difference. Obvious cost difference between the winners’ bid and the other bids.
6)     Similar increase in bid prices. There is a common similar per cent of increase in the bid prices even though they came from different bidders.
7)     Similarities. There are physical signs of collusion in the submitted bids (i.e. same handwriting, same numerical errors, same contact information, etc.)
8)     Coercions from the procuring entity. Qualified bidders initially took steps to bid but decided to not continue.
9)     Same rankings or no bids in rebids. Rebidding results show that the companies have the same ranking as the prior bidding or some bidders didn’t submit any proposal at all.
10)  Increase in cost. There are similar and standard increases in the costs of some line items when the project is rebid.
11)  Prices of the items drop once a new bidder comes into the picture

B.   MISINTERPRETATION OF FACTS
1)     No recorded minutes of the bid-opening meeting.
2)     Minutes of the bid-opening meeting are not signed in the original form by those who attended the meeting.
3)     There are time delays between the bid-opening and the dissemination of the minutes of the bid opening to all bidders.
4)     Lacking records. Procuring entities fails to keep written records of the procurement process (i.e. written reports on bid evaluation process, minutes of the meeting, copies of submitted bids, copies of correspondence of the bidders.
5)     Tampering bids. Submitted bids contain written corrections, deletions, or interlineations that changes key information (i.e. prices, validity period of the bid).

C.   KICKBACK BROKERS
1)     Single sourcing of a bidder. Contracts are awarded to the same supplier without competition at higher-than-market prices.
2)     An unnecessary middleman. A middleman or local is involved in a contract and his addition has no obvious value to the performance of the contract.
3)     Giving gifts. This occurs when procurement officials accept expensive gifts and dine in meals with bidders or their local agents.
4)     Overtly rich government officials. There are rich public officials who are in-charge of overseeing or implementing the procurement program even though their salaries are low.
5)     Reputation. Locals know the credibility of their officials and know when he/she accepts or demands bribes.
6)     Repetitive poor contractors. Concurrent awarding of public contracts to poor performing contractors.
7)     Ex-officials are suppliers. The former government officials become suppliers to the group that got the contract.
8)     Family connections. Local agents or suppliers are closely related, either through family or friendship with officials who run the procurement program.

D.   USE OF SHELL COMPANIES
1)     New names. Unknown companies with no track records in doing contracts serve as subcontractors to foreign or local contractors.
2)     Secrecy jurisdiction. A contractor or subcontractor company is registered in a “secrecy jurisdiction.” Otherwise called “Tax havens” where legislations allow for undisclosed offshore financial activities.
3)     Payments are made against invoices to accounts held by companies registered in a secrecy jurisdiction for contractors who are otherwise locally registered
4)     Opaque structure.        Subcontractor companies have an unclear ownership structure.
5)     No names. The owners of the subcontractor companies are listed as law firms or as incorporation agents and not the individual’s names.
6)     No offices. Subcontractor companies have no corporate facilities (i.e. headquarters, office space, etc.)
7)     Personal numbers. The phone numbers provided by the subcontractor companies are personal numbers or answering services.
8)     Family business. The family members of senior government officials own or manage the companies that receive the contract.
9)     Official sightings. Government officials are often seen in company offices or headquarters.

Wednesday, 13 March 2019

KE VS UG: THE BATTLE FOR FIRST OIL


ON YOUR MARKS:
Kenya has a 2022 target for “first oil” exports from Turkana through a pipeline via the new Port of Lamu. And here I am not talking about the “early oil” that Kenya is trucking to Mombasa from Turkana, which in reality is an operational activity to remove oil accumulations from past drillings of exploration and appraisal wells. I am correctly referring to commercial-scale exports through the Turkana-Lamu pipeline.

Across the border, the Ugandans are also planning to export their first commercial oil from Lake Albert oil basins through a pipeline via the Port of Tanga in Tanzania. Their target first oil export date appears to be slipping from 2021 to 2022.

GET SET … AND GO!!
Yes, it will be interesting and indeed healthy competition to watch who between the two countries and the two ports of Lamu and Tanga will be ahead in flagging off the first oil export ship.
It gets juicier with both presidents wanting to lay their legacy on these projects!

DISTANCE TRAVELLED:
Uganda discovered commercial oil in 2006 while Kenya found theirs in 2012. At one point the two countries had agreed to export their oil through one joint-venture pipeline passing from Western Uganda via Turkana to Lamu. However, this plan was dropped in 2015 when Uganda, for whatever reasons, decided to build their pipeline, through BongoLand, to Tanga jointly with the Government of Tanzania.

The 821 km Turkana-Lamu pipeline is planned to pump up to 120,000 barrels per day, while the 1445 km Uganda/Tanzania pipeline is planned to through-put 216,000 barrels per day.
Uganda is also simultaneously planning to construct a new 60,000 barrels per day refinery near the oilfields for completion about 2022.

My assessment is that in terms of alignment of various participating parties; legal/institutional capacity development; and status of project design studies, Uganda is definitely way ahead of Kenya. The only hitch, which was encountered recently, is serious disagreement on commercial terms (tariffs) in respect of the Uganda/Tanzania pipeline between the investors and the two governments.

BET ON UGANDA TO WIN;
If pipeline commercial terms are thrashed out in good time, it is possible for Uganda investors (Total, CNOOC, and Tullow) to commit investments and realize their production and pipeline projects for fist oil exports by 2022. Construction lead times are usually three years.

THE ODDS AGAINST KENYA WIN:
On the Kenyan side, the investors (Tullow, Total, and Africa Oil) are working at full speed to conclude their design studies in good time to permit final investment decisions by the end of 2019.
This would mean production and pipeline projects construction commencing in early 2020 for first oil export by 2022.
However, Kenya is not as ready as Uganda is. The facilitative legal and institutional capacity development is certainly miles behind Uganda. Commercial and fiscal terms are understood to be far from being agreed between the Kenya government and the investors, with no visible indication when this will be concluded.

While the land issues are mostly sorted out in Uganda, in Kenya we are just beginning the land acquisition process with evidence of weak alignment between national and county governments. Pushing oil from the wells will require large amounts of water that will need to be pumped from Turkwel dam in the neighbouring West Pokot County to the Turkana oilfields. For this to be realized, necessary protocols will need to be agreed and finalized early enough.

The above issues are likely to delay investment commitments by Kenyan oil investors. It is my opinion that unless the Kenya government prioritizes attention on the Turkana oil, Kenya may needlessly miss the 2022 date which would be very unfortunate.

In Uganda, oil has always received the highest possible level of official attention and facilitation.
With the latest near-total focus on THE BIG FOUR AGENDA in Kenya, there is a danger of oil development falling outside the cabinet priority radar.
Outstanding agreements need to be polished and signed. Legal, Institutional and technical capacity development needs to be fast-tracked. Well-oiled relationships between national and county governments will also need to be created and nurtured.
This way Kenya can be a serious contender for the “2022 first oil export prize” within the friendly contest with Uganda.

There is no compelling reason why Kenya should not make the 2022 target.