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NEWS & CURRENT AFFAIRS

The Nairobian

Firms protest cancellation of lucrative airport contracts

Business

By Mwaniki Munuhe | May 03, 2016

**Two service providers have raised yet another controversy concerning JKIA contracts {Photo Courtesy}**

Two service providers have raised yet another controversy concerning Jomo Kenyatta International Airport (JKIA) contracts.

The two have written protest letters to the Kenya Airports Authority (KAA), claiming their contracts were revoked without explanation. NAS Airport Services Ltd and Travel Point Forex Bureau's agreements with KAA were revoked only months after they were signed.

NAS had signed an agreement with KAA to provide catering services while Travel Point was to offer forex services. The services are some of the most lucrative at the airport, which receives at least 22,000 passengers daily.

“We acknowledge receipt of your letter revoking the letter of offer for our lease and wish to note our discontent. We note also that the letter does not give us any reason for the revocation or give a way forward,” reads a letter signed by Travel Point Managing Director Joanne Mwangi.

“We have spent a considerable amount of money on office construction. A revocation of our lease will be a big blow to our business in which we have invested heavily. The job losses of more than 10 members of staff will be most unfortunate,” the letter says.

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It is understood that the fight for catering business started as soon as NAS was awarded the contract on November 5, 2015.

According to documents in our possession, the contract between NAS and KAA, although signed for three years, would not last five months. No reasons were given for its cancellation.

Acting Managing Director Yatich Kangugo did not respond to our queries. Similarly, Acting General Manager William Simbah, who signed both the contract and the revocation letter, declined to comment on the matter, only saying, “I don’t want us to cross that line. I cannot discuss this matter with you. The managing director is the spokesperson for the organisation.”

The contract has since been advertised with a rider that “bidders already operating at JKIA are not eligible.”

On November 4, 2015, KAA wrote to NAS notifying the firm that it had been awarded a contract to provide catering services at JKIA.

The letter, signed by Mr Simbah, reads in part: “KAA wishes to grant you premises to operate or provide catering services at JKIA.”

NAS accepted the offer and proceeded to sign the agreement the following day on November 5. But in a surprising turn of events, KAA dispatched a letter to NAS on April 11, this year informing it that the offer to operate the catering business had been cancelled.

The revocation letter reads in part: “Please note that the Authority hereby revokes its offer contained in the letter dated November 4, 2015 regarding establishment of a catering facility at Terminal 1E.”

As in Travel Point's case, no explanation was given for the cancellation. NAS says it had already purchased the equipment necessary for the execution of the contract and notified KAA of the same.