By Steve Mkawale, Allan Kisia and Peter Opiyo
County Council of Narok stands to lose Sh1 billion in Masai Mara Game Reserve e-ticketing deal it sealed with Equity Bank.
A forensic audit report tabled before a parliamentary committee by Auditor General Edward Ouko has recommended the council should re-negotiate the contract that favours Equity. The bone of contention is a clause in the contract that states payment of commission to the bank be based on the threshold of Sh1.5 billion minimum revenue base.
“Equity Bank should charge the council the commission based on revenue collected through the system without setting a minimum threshold on revenue collected.” said the official. Ouko told the Local Authorities committee that after the bank won the tender to provide pre-paid smart card system, it introduced alterations in respect to the duration of the contract and the commission payable.
The move forced the two parties to re-negotiate the deal, but no agreement was reached on the rate of commission prompting the bank representatives to seek further consultations. But on March 28, last year, the council wrote to Equity and gave it a final proposal, which was the same as the one presented during negotiations with the bank, read the report.
The council had offered the bank a ten-year period and a commission of 7 per cent of revenue collected but Equity, which acknowledged the terms gave a rider to the effect that commission will be based on an annual revenue base of Sh1.5 billion, below which the council would meet the commission deficit.
The committee chaired by Wundanyi MP Thomas Mwadeghu put to task the two officials of the council over the flawed contract that will eventually lead to the local authority losing Sh1 billion.
Council clerk Pius Mutonyi and Treasurer Andrew Wanyonyi were unable to explain to the committee the flaws in the tendering system that led to Equity Bank winning the tender.
They could not explain why the bank was being paid huge amounts of money in commission yet it was the lowest bidder during the tendering process. Mutonyi explained that after Equity won the tender, they decided to enter into a partnership where the council was to use the banks infrastructure in collecting revenue.
But he was hard pressed to explain why such details were not included in the expression of interest advertisement that sought for the services.
MPs Joseph Gitari (Kirinyaga), Benjamin Langat (Ainamoi) Charles Mutisya (Kitui West), Pollins Ochieng (Nyakach) accused the council of favouring Equity in the tendering system. Langat observed that although Equity was the lowest bidder (Sh28 million) and was awarded the tender, they ended up being the most expensive after introducing commission and other charges.