The award of the tender for pre-export inspection of motor vehicles has laid bare deep-seated interests and bitter business wars in the lucrative sector.
A bid by the Kenya Bureau of Standards (Kebs) to engage more firms in the inspection of vehicles imported into the country, is fuelling the conflict.
Last week, Parliament adopted a committee report tabled by Mvita MP Abdulsamad Nassir, who chairs the Parliamentary Investment Committee (PIC), that two firms — EAA Company Limited and Auto Terminal Japan (ATJ) — be barred from engaging in vehicle inspection tenders following alleged queries around the award.
Quality Inspection Services Japan (QISJ) has been the sole contractor for the Sh1.5 billion annual tender, which expires in April 2021.
A report by the Auditor General and a probe by PIC has now led to the Ethics and Anti-Corruption Commission’s decision to summon Kebs Board.
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Kebs is accused of awarding the tender for pre-export verification of conformity of standard services (PVOC) to the two firms without seeking the Attorney General’s recommendations.
PIC has recommended to the Public Procurement Regulatory Authority (PPRA) to initiate debarment proceedings against the two firms. The House team cited contravention of the Public Procurement and Asset Disposal Act, 2015 for allegedly using questionable documents while bidding for the tender.
However, insiders within the motor vehicle inspection segment claim there is a deliberate push to maintain monopoly.
“There seems to be a deliberate attempt to block competition. When there is monopoly, it is the end user who suffers. As it were now, the inspection is done in the interest of the exporter and not the importer,” said an official privy to the on goings.
And indeed, there have been complaints on tampering with the odometer and other specifications, with car buyers left feeling shortchanged. “This cannot be properly addressed if the inspection is done through a monopoly,” the source said.
PIC recommends that Kebs Managing Director Bernard Njiraini be held responsible for ignoring its advisory to seek and follow the Attorney General’s legal opinion before awarding the tender.
But Njiraini insists the standards agency sought the AG’s advice only that it was not forthcoming within the expected seven days. Moreover, he says, a legal opinion they independently sought, said there was nothing wrong in engaging additional inspectors since there was no non-exclusivity clause in the signed contract.
There was a Board resolution to add more inspection companies both for goods and used motor vehicles, spare parts, and mobile equipment.
Njiraini said it was his responsibility to mitigate against the risk of having one company, considering that in 2014 Kebs banned an inspection company JEVIC and if during that time there was only one company then it would not be possible to inspect vehicles.
“We did nothing wrong in the entire process,” Njiraini said. “And upon evaluation, the Kebs technical committee undertook due diligence to ascertain capacity of the companies to undertake inspection based on specified evaluation criteria. ATJ was engaged by Kebs in a previous contract while EAA had been sub-contracted by QISJ in a previous contract. If these companies are fake as alleged then we should recall all vehicles they certified in previous years.”
According to Kebs, the third party inspection companies are engaged as agents of Kebs and the standards body neither pays any money nor do the agents. It is the importers who pay Sh15,500 and remit Sh4,500 to Kebs as royalties to facilitate its operations. “Income from it is around Sh400 million per year and comes in the form of royalties,” Njiraini says.
Inclusion of the two firms would ease the cost of inspection by more than Sh4,000 per car. In an affidavit to PIC, ATJ’s Director of Africa Affairs Isaac Kalua, said there was no way the auditors would have returned a report favourable to them after being facilitated by their competitors in their audit missions.
Kalua also said ATJ is not a rookie company, and is contracted by various governments to undertake Biosecurity and Roadworthiness inspection services in New Zealand, Australia, Jamaica, Zambia, Tanzania.
The company has its affiliate operations in UAE, UK, Singapore, South Africa, Thailand, US and China among others.