De La Rue in fresh push for currency printing contract

The De La Rue building in Nairobi. The British printer is lobbying for another 10-year contract to exclusively print Kenyan currency notes. Photo/FILE  Nation Media Group

By Jaindi Kisero


IN SUMMARY
Business Daily has learnt that a Cabinet paper supporting the proposal to award the currency note printer an exclusive 10-year deal is ready for tabling this week.
De La Rue has argued that the exclusive deal they are looking for will still deliver competitive prices because parties will be holding biannual review of bank note prices in light of prevailing market prices and technological advancements.
When they meet over the matter this week, the Cabinet will be expected to make a decision on whether the government should buy 40 per cent shares in De La Rue’s Ruaraka-based subsidiary.


British currency printer, Dela Rue, is lobbying the Jubilee government for yet another 10-year contract to exclusively print Kenya’s currency notes.

The Business Daily has learnt that a Cabinet paper supporting the proposal to award the currency note printer an exclusive 10-year deal is ready for tabling this week.

If the Cabinet approves the proposal, the Central Bank of Kenya (CBK) will have a free hand to negotiate prices directly with De La Rue without considering offers from other international currency printers.

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Originally approved by the Kibaki Cabinet — at a meeting on September 13, 2011 — the proposal is returning to President Uhuru Kenyatta’s table after an investigation by Parliament’s Public Accounts Committee (PAC) criticised it for, among others, going against public procurement laws and regulations on competitive bidding.

A sitting of the full House controversially overturned the PAC’s findings in a debate that took place against the backdrop of intense behind-the-scenes lobbying.

Matters got complicated later on when the then Finance minister Njeru Githae demanded a fresh opinion on whether an exclusive deal negotiated as proposed was in line the with public procurement laws and regulations.

The matter was left in abeyance for a protracted period until the exit of the previous administration before a decision was made.

Whether the Uhuru Cabinet will approve the deal remains to be seen.

But the question as to whether the proposal is in breach of procurement laws and regulations has definitely not been resolved.

Early this year, the Public Procurement Oversight Authority (PPOA) — the agency that oversees procurement by public entities — argued that even where the law gave public entities the leeway on choice of procurement methods, competition and transparency had to be maintained – effectively casting shadows on the validity of the proposal.

In a letter dated February 13, 2013, PPOA director general J O Juma argued that De La Rue Printing Kenya Limited was a private entity and was under obligation to comply with the Public Procurement and Disposal Act in its dealings with the government.

“As long as the purpose is not to avoid competition, the law provides for alternative methods for public entities to source for suppliers,” he said, stressing that the key object of the Act was to “promote competition and to obtain best prices”.

De La Rue has argued that the exclusive deal they are looking for will still deliver competitive prices because parties will be holding biannual review of bank note prices in light of prevailing market prices and technological advancements.

When they meet over the matter this week, the Cabinet will be expected to make a decision on whether the government should buy 40 per cent shares in De La Rue’s Ruaraka-based subsidiary. If the acquisition is approved, the government will purchase the shares at Sh600 million in a completely new company to be jointly owned by the government and the British printer.