The Kenya ICT board has awarded $1.28 million to 21 tech startups under its Tandaa Local Digital Content project. But the board come under criticism from various quarters for the handling of the grants.

The funding comes from a World Bank grant and is designed to help local innovators turn ideas into businesses.

The second batch of grants have, however, come in for serious criticism from several sections of the industry. These criticisms are based on such factors as the lack of progress made by previous recipients, grants being made to established tech players rather than new startups, and funding given to foreign firms rather than Kenyan ones.

The roles of ICT Board chief executive, Paul Kukubo, and the ministry of information and communication permanent secretary Bitange Ndemo have also been called into question.

The ICT Board angrily refuted claims of Tandaa’s failings at a meeting to resolve the issues, and defended the judging criteria.

The level of success achieved by past recipients of the Tandaa grants has been called into question by industry players, with Idd Salim, Chief Software Developer at Symbiotic Media Consortium, saying that past recipients had nothing to show for the money they received other than “cars and girls”.

Tech blogger Robert Alai raised similar concerns. “How does the ICT Board measure the success rates?” he asked.

“Of the 2010 and 2011 awardees, only AskADoc is still existing. Others folded the moment they were awarded the grant.”

Agosta Liko, founder of PesaPal, commented that were the ICT Board a venture capital firm investors would not be impressed with the high failure rate of Tandaa funded projects.

Paul Kukubo confirmed that the board had enlisted Deloitte to undertake impact assessments, and said that since it was only a year since the initial grants it was still too early to adequately measure success rates. But even if funded projects had a high failure rate, he added, the few that were successes made up for failures.

Criticism was also made of the ICT Board’s decision to include more established industry players, such as Virtual City, in the funding grants. Liko questioned why other established firms were not included.

More controversial has been the row over the inclusion of foreign-run firms such as Iridium Interactive.

“Why is it that the ICT Board does not see it fit to limit the award to Kenyans and not let it be that every Tom, Dick and Mary from everywhere will come, get the grant and leave the country at will?” said Alai.

“Look at the two lists and you will see that not less than 35% of the awardees are foreign owned.”

Alai referred to such companies as “tech colonialists”, pointing to the Sh4 million awarded to Iridium, which arrived in Kenya at the invitation of Google in 2010.

Kukubo and Ndemo claimed that the foreign companies given grants will offer employment opportunities to Kenyans, and said the grant was open to all firms registered in Kenya, making the likes of Iridium eligible.

Alai also moved to criticise the personal involvement of Kukubo and Ndemo, alleging that among the winners of funding were former colleagues of Paul Kukubo at 3Mice, the company he co-founded. He called for a clear criteria for the judging of winners.

“The judging panel should be revealed even after the end of the judging process so as to remove the cloud over who actually does it,” he said.

Kaburo Kobia, Project Manager for Local Digital Content at the ICT Board, said that the judging process is fair, with submissions made online and initially judged blind, with names of applicants removed.

This was followed by evaluation of business plans and physical interviews. Kukubo explained that the resultant winners were a mixed bag.

“We left out some good projects and put in others that would not have normally made it through such processes,” he said.

“The mix ensures that proposals that cannot be funded elsewhere also get funding. It also establishes a good mix from which a case study on funding projects in Kenya will be generated.” He did, however, agree that failed applicants needed to be given the reasons for their failure so as to help future fundraising efforts.

Ndemo explained the importance of the grants in improving local content and helping the Kenyan economy.

“We have moved from discussing infrastructure to policy, content and capacity building in the industry,” he said. “We need applications that can be able to offer Kenyans solutions and help us create internal efficiencies. By so doing we will save the economy billions of shillings.”

Kukubo said innovation was central to the board’s ambitions for technological development in Kenya, though he warned against a culture of “grant dependency” and stressed the importance of developing business plans that worked regardless of whether grants were obtained or not.

“Our aim is to not only scale up the existing local ICT businesses but to support start-ups like those being awarded today,” he said.