CBK claims information on currency tender may compromise national security

According to CBK information on the tender may compromise national security if the proceedings are opened to the public. [Photo: Courtesy]

The Central Bank of Kenya (CBK) has been granted its wish to have a case challenging the award of a multi-billion tender for new currency printing heard in camera.

The CBK, through its lawyer Ochieng’ Oduol, had wanted the public locked out of the matter, which has been filed at the Public Procurement Administrative Review Board, appealing the decision to pick British firm De La Rue International Ltd.

Swedish firm Crane AB that offered the lowest bid accuses CBK of flouting the law and lacking transparency in awarding the lucrative deal to De La Rue International Ltd under the guise of 15 per cent margin preference to a firm with local shareholding. 

CBK claims that some of the information on the tender may compromise national security if the proceedings are opened to the public and the media.

Crane AB lawyer James Gitau Singh opposed the application, saying that in any case, both CBK and De La Rue had revealed much of the information in a case where the British firm had attempted to stop the open tender in a cause it filed.

“The parties appear to be applying double standards of open hands and gloves. What is that they are now concealing from the public yet they (CBK and De La Rue) were on the opposing side in an early case at the High Court?” Gitau asked.

When the case came up for hearing on Friday, the procurement review board chairman Paul Gicheru ruled that owing to the nature of the matter, the case be heard in camera except for lawyers and parties.

Mr Gicheru further set January 3, 2018 as the hearing date while ordering parties to file written submissions on or before January 2.

This is a second suit seeking to stop the CBK from awarding the lucrative deal to De La Rue.

Legal entity

Crane AB claims that De La Rue International Ltd is distinct from its affiliates De La Rue Kenya EPZ Ltd and De La Rue Currency and Security Print Ltd which are registered in Kenya.

“De La Rue International Ltd is a company incorporated in the UK in 1965. It’s a distinct legal entity and does not have any Kenyan shareholders. It does not, under any law, qualify as a preferred supplier,” Crane argues in its application filed by its regional sales director, Angelo Antonio Kok.

Crane AB is seeking a declaration that CBK unlawfully awarded the tender, that Crane AB submitted the lowest bid price, and wants CBK ordered to re-evaluate the tenders of only the complaint bidders and then award the tender afresh.

Crane AB argues that CBK was wrong to apply the 15 per cent preference margin whose application was nullified upon the repeal of the Public Procurement and Asset Disposal Act, 2005 Cap 412A. “CBK is barred by law from relying on regulation 177 of the Public Procurement and Disposal Act regulation 2017 which intended to operationalise section 157 (8) (b) of the 2015 Act. The regulations are yet to be gazetted and or tabled before Parliament for scrutiny and approval,” argued Crane AB.

Mid this month, activist Okiya Omtatah moved to the High Court and obtained temporary orders stopping the award until the case is heard and determined. 

The matter is set for hearing on January 17. In a battle to break about a five-decade monopoly over currency printing in Kenya, Omtatah wants British currency printer De La Rue banned from fresh tendering for printing new notes if the current tender is struck off.

Crane AB, however, accuses CBK of failing to give all tenderers an open and transparent opportunity thus compromising integrity, fairness, transparency and accountability in the process.

CBK Governor Patrick Njoroge said recently that the Treasury planned to issue the new currency in the second quarter of 2018.

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