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How Beth Mugo’s firm won duty free shop tender

By Moses Michira
Updated Sat, February 27th 2016 at 00:00 GMT +3
Nominated Senator Beth Mugo

NAIROBI: Nominated Senator Beth Mugo has in the past sharply criticised the controversial lucrative tender to operate duty free shops.

But The Standard on Saturday has established that Beth International - owned by the Senator, was allocated space in 2014, nine months before the winning bidder, Dufry International, was signed up.

While the award to the Swiss firm was questionable, Beth International did not meet requirements set by the Kenya Airports Authority (KAA).

Beth International was offered space in unclear circumstances at Terminal 1A in early 2014. Insiders at the KAA have confirmed that this was the second shop given to the firm. It was also granted another shop at Terminal 1B, previously Terminal 2.

Starehe MP Maina Kamanda, who chaired Parliament's transport committee, said the controversial award had cost jobs of the past management.
"The concession was controversial and it would be the reason why former CEO Lucy Mbugua was sent home," Mr Kamanda said, adding "I do not know if the Senator is an operator".
Ms Mbugua was fired in June last year.
Businessman-turned-televangelist Kamlesh Pattni had won and operated the lucrative concession, resisting several attempts to kick out his companies before he was finally ejected.

"We are in business; we have been since 1976," Ms Mugo's personal assistant responded when we inquired about the matter. He declined to discuss the lease details, only saying the company's managing director, who was said to be out of the country, can divulge details.

Behind the scenes, it has been one long roller coaster ride for the companies eyeing a piece of the business including Beth International. When it became clear that Pattni's World Duty Free was on its way out, several local firms were eyeing a share of the business.
In March 2012, KAA floated an international tender, inviting bids from prospective operators.
Requirements for eligible bidders included having been awarded a similar contract to the prospective one, and in at least three international airports with annual passenger traffic of seven million passengers.
On that criterion alone, none of the Kenyan firms including the previous operator, World Duty Free would be eligible.
Four companies including Siamanda Limited, Zephyr House Limited and Glamour House Limited- and Ms Mugo's firm protested.
"Your Excellency the tender is unfair, unconstitutional, discriminatory and against national interest," reads a complaint letter authored by NM Mugo, on behalf of Beth International.
Ms Mugo, then serving a third term as legislator for Dagoretti, was listed among the three directors, alongside the author and one Murugi Mugo.
President Kibaki was the intended recipient of the letter, which was also copied to then Transport Minister Amos Kimunya.
"In view of the foregoing, this is to humbly request your office to intervene, with a view to ensuring the cancellation of the tender, the reservation of the opportunity to Kenyan companies and the issuance of a fairer and more objective requirements," reads the complaint letter dated June 8, 2012.
However, there was no indication whether Ms Mugo got a response from State House.
Former KAA managing director Stephen Gichuki was fired in August 2013 and Ms Mbugua – then serving as general manager in marketing, appointed as his replacement in an acting capacity.

How the board and management handled the duty free business operated by Pattni's firms, had divided the directors.

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