Former CBK deputy governor, Mwatela testifies on De La Rue

By Alex Ndegwa

Former Central Bank of Kenya deputy governor Jacinta Mwatela testified before a parliamentary committee behind closed doors about a controversial multi-billion shillings currency printing deal.

Ms Mwatela who opposed the suspicious contract while at CBK requested to give her testimony in camera citing threats to her life and was granted permission by the House Public Accounts Committee during a hearing at Parliament Buildings on Thursday.

PAC is probing claims the Government may have lost more than Sh2 billion in questionable short-term contracts with Ruaraka-based British currency printing firm, De La Rue, after the cancellation of a competitive international tender in 2006.

Mwatela asked the MPs’ committee chaired by Ikolomani MP Bonny Khalwale to assure her of her security as the evidence she would give touched on people she worked with while at CBK.

Former Central Bank of Kenya deputy governor, Jacinta Mwatela on Thursday testified to the Public Accounts Committee in Camera on Controversial De La Rue contracts. (Photo:File/Standard)

"I am very uncomfortable to discuss what I know in public," she said. "I would like to be assured that my life is protected. I lost a job and the only thing I have is my life."

Mwatela was moved from CBK in 2008 to the Ministry of Northern Kenya Development and Arid Areas as a Permanent Secretary, a post she declined. She then linked her being moved from CBK to the contentious deal now the subject of the inquiry.

"There is real fear in me about being called here to give information about an office I left two years ago," Mwatela told the committee.

Khalwale assured her she was "extremely safe" within the precincts of Parliament. He added she was protected under the Witness Protection Act and that the Constitution guarantees the sanctity of life.

Journalists were consequently asked to leave before she began testifying.

In an earlier hearing, Khalwale had indicated Mwatela would appear to explain her opposition to the controversial contract.

The committee heard Ms Mwatela had in a letter to the Finance Minister on August 2006, expressed reservations on the design, manufacturing and supply of the new generation notes by De La Rue and asked for the cancellation of the contract.

Then Finance Minister Amos Kimunya is expected to appear before the committee to shed light on contents of a letter he wrote on December 14, 2007, suggesting De La Rue had agreed to the termination of a contract and undertook not to claim damages.

PAC is probing claims that cancellation by National Rainbow Coalition Government of a 10-year contract in 2003, which would have run until December 2012, facilitated a scheme to siphon public funds through interim orders at inflated prices.

The Narc Government then argued the Kanu regime had single-sourced the contract. But the subsequent action to continue without a deal that benefits from economies of scale and the revocation of the competitive international tender in 2006 has raised concerns that taxpayers have lost Sh2.7 billion in exploitative deals.

De La Rue has threatened to stop local currency printing operations and pull out of Kenya if negotiations for a joint venture with the Government fail.

MPs have, too, raised a red flag over the deal in which the Government is to buy a 40 percent stake in the firm and hand De La Rue a 10-year exclusive contract to print Kenyan currency.