Why two companies won Bank of Tanzania banknote reprint tender

By  Paul Owere Web Editor Mwananchi Communications Ltd

What you need to know:

• BoT governor Emmanuel Tutuba told The Citizen that the selection of British security printer De La Rue International Limited and Crane Currency of Malta was based on established procedures during the evaluation process.

Dar es Salaam. The Bank of Tanzania (BoT) has revealed why two security printing companies were awarded a tender to reprint Tanzania’s banknotes.

BoT governor Emmanuel Tutuba told The Citizen that the selection of British security printer De La Rue International Limited and Crane Currency of Malta was based on established procedures during the evaluation process.

“Contracts are usually awarded based on technical and financial performance criteria set during evaluation,” he said.

Documents on the procurement portal seen by The Citizen show that neither De La Rue nor Crane Currency submitted the lowest bid, raising questions as to how they were selected. De La Rue was initially disqualified before successfully lodging an appeal with the Public Procurement Appeals Authority.

The two firms have been contracted to print banknotes in all four denominations that are currently in use (Sh10,000, Sh5,000, Sh2,000 and Sh1,000).

Information available on the Tanzania National e-Procurement System (TANeps) indicates that the tender (PA/082/2022-23/DSM/G/64), opened on April 17, 2023 and received five bids per denomination. However, until late 2023, the tender had not been awarded.

In the international competitive tender, each company was required to submit a bid security of $3,100,000 (Sh7.9 billion) per lot of interest.

The companies that bid included Polska Wytwornia Papierow Wartosciowych Spolka Akcyjna, Oumolat Security Printing LLC, Crane Currency Malta, De La Rue International Limited and Giesecke+Devrient Currency Technology GmbH.

Earlier this month, BoT sent out bulk messages about the importance of taking good care of banknotes because reprinting them costs the nation billions of shillings.

However, the central bank did not disclose the exact amount spent on the reprints, stating that they only do so when necessary.

“Banknotes deteriorate rapidly when exposed to moisture or constant folding, significantly reducing their lifespan,” Mr Tutuba said in his interview with The Citizen.

The announcement sparked concerns, with fears spreading that Tanzania might face a banknote crisis similar to the one Nigeria experienced a year ago.

However, Mr Tutuba, reassured the public, stating that the central bank has a robust mechanism in place to monitor the flow of banknotes.

“BoT has been closely monitoring its internal currency management strategy to ensure an adequate stock of banknotes of all denominations throughout the year,” he said.

Background

In 2023, the Public Procurement Appeals Authority (PPAA) ordered BoT to restart a multi-billion-shilling tender for the reprinting and supply of banknotes due to flaws in the vetting of bidders.

The quasi-judicial body found that all four international firms shortlisted after the pre-qualification process failed to comply with the criteria set in the tender documents.

The decision came after an appeal lodged by De La Rue International Limited, challenging its disqualification from the lucrative tender floated by the central bank in July 2022.

The appeal arose from the pre-selection of suppliers who tender for reprinting banknotes at the BoT sub-head office in Dar es Salaam.

The central bank invited applicants to apply for the tender via the Tanzania National e-Procurement System (TANePS). Eight applications were received by the July 8, 2022 deadline.

Following an evaluation, four applicants who complied with the prequalification documents were shortlisted. These included Orell Fussli AG, Polska Wytwornia Paplerow Wartosciowych Spolka Akcyjna, Oberthur Fiduciaire SAS, and Giesecke+Devrient Currency Technology GmbH.

De La Rue was informed by the BoT Tender Board that it had not been shortlisted due to its failure to meet the required financial capability commitment.

Furthermore, the company’s disqualification was due to submitting a bank letter lacking a commitment statement to guarantee it during tendering and execution.

Despite the company’s efforts to remain in the tender, an independent review panel appointed by BoT rejected its application for an administrative review, concluding that the disqualification was fair.