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No end to car import wars as firm accuses lawmakers of bias

By Jeckonia Otieno | October 25th 2020
Imported cars at the port of Mombasa. [File, Standard]

The row over the inspection of used motor-vehicles imported into Kenya deepened after one of the players accused Parliament of bias.

EAA Co Limited, one of the companies granted the Pre-Export Verification of Conformity (PVoC) tender alongside Auto Terminal Japan (ATJ), now says it followed due process before it was considered for the tender which has been monopolised by Quality Inspection Services Japan (QISJ).

The company argues that since it was engaged by the Kenya Bureau of Standards (Kebs) in March this year, it has generated royalty income to the government to a tune of Sh45 million.

As the company laid out its grievances with Parliament’s decision, High Court Judge P. Nyamweya granted orders stopping the implementation of parts of the report by Parliament.

Kebs Managing Director Benard Njiraini had on October 14, 2020, filed an application to stop implementation of the report.

Two weeks ago, the National Assembly adopted a committee report tabled by Mvita MP Abdulswamad Nassir, the chairman of Parliamentary Investments Committee (PIC), which barred EAA and Auto Terminal Japan (ATJ) from the Sh1.5 billion annual tender.

The company sought to clarify that it has never been barred from participating in public procurement in Kenya. It said that it participated in the Kebs tender in November 2019 as an eligible candidate and bidder.

“Our bid was evaluated according to the criteria previously used to evaluate past tenders and as set out in the public procurement laws of Kenya.

“Our bid was deemed competitive upon which we were awarded the said tender and contracted in line with the due diligence that physically confirmed EAA’s qualifications to perform to the tender requirements,” argued the company.

The company reasoned that since it was awarded the tender, the price of inspection has since dropped, offering used motor vehicle importers a better deal by reducing inspection costs by about Sh4,000 per vehicle.

It noted that an appeal to the Public Procurement Administrative Review Board (PPARB) was rejected and a court case seeking judicial review of the board’s decision also withdrawn.

The company noted, “The queries raised by the Ethics and Anti-Corruption Commission (EACC) and the Public Procurement Regulatory Authority (PPRA) have been fully answered and also cleared by the Kebs’ Due Diligence Report dated February 26, 2020.”

EAA pointed out that the PIC ignored a 2016 National Assembly report which confirmed that it had the requisite qualifications to take part in any tenders by Kebs.

This, it argues, points to bias in consideration by the current Parliament, charging that the decision “was actuated by extraneous circumstances”.

“The PIC (11th National Assembly report), at page 60, had considered that the respondent, EAA Company Limited, was headquartered in Rinkan, Yamato-City, Kanagawa Japan, owned inspection facilities strategically located in Yokohama (Tokyo Bay) which is the main port, Kawasaki (Tokyo Bay), Nagoya and Osaka in Japan.

That the company was also present in the United Kingdom, Dubai-United Arab Emirates and Tanzania, and had been providing pre-shipment verification and conformity to standards inspections for used motor vehicles for the Tanzania Bureau of Standards and Uganda National Bureau of Standards since its inception in 2007,” the company stated.

The company further noted the report showed that it had been approved for road-worthiness inspection with regards to competence in its personnel, equipment and procedures necessary for motor vehicle inspection. EAA denied claims of forgery in order to bid for the tender in 2014 revealing that its documents and inspections sites were used by its rival company to bid for the tender in 2014/2015.

The company said: “The said contract was awarded to QISJ whilst now ironically asserting that EAA Co Ltd was the one who forged its documents and qualifications in bidding for that same tender. This information has been presented before these agencies, who have either ignored or refused to act upon the information.”

EAA also revealed that QISJ sub-contracted it to carry inspection services for tenders awarded between 2012 and 2014. Before the award of the 2019-2021 tender, a team from Kebs visited the company offices in Japan, UAE, and UK and confirmed the sites and confirmed them as genuine.

PIC recommended that Njiraini should be held responsible for ignoring its advisory to seek and follow the Attorney General’s legal opinion before awarding the tender. In his response, the managing director stated he sought the AG’s advice which never came within the stipulated seven days.

Kebs was forced to seek independent legal opinion which gave the award a clean bill of health due to the fact that there was no exclusivity clause.

There was a Board resolution to add more inspection companies both for goods and used motor vehicles, spare parts, and mobile equipment.

Njiraini said, “We did nothing wrong in the entire process. And upon evaluation, the Kebs technical committee undertook due diligence to ascertain the 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.”

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