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Go slow on De La Rue deal, MPs caution State

CARTOON
By | March 20th 2012

By Peter Opiyo

Parliament has raised concern over the technology used in printing Kenyan currency as the Central Bank of Kenya plans to buy 40 per cent stake in De La Rue Currency Print and Security Limited.

Parliamentary Accounts Committee has questioned the status of the technology at the money minting and printing factory as CBK negotiates a deal to spend Sh655 million in purchasing part of the company.

The MPs also questioned why CBK intends to spend this much to buy only 40 per cent stake yet the company is worth about Sh1.1 billion.

"This is far much more than the 40 per cent CBK wants to buy, in fact they should pay Sh454 million, so who is pocketing the difference,? Asked Committee Chairman Boni Khalwale.

But Investments Secretary Esther Koimett said the balance is retained earnings that normally don’t go to a new company after a transfer.

The name of the new company has been proposed as De La Rue EPZ Kenya. It is this firm that the government will have 40 per cent stake.

The Committee also instructed Auditor General Edward Ouko to conduct an audit of CBK to bring to light the dealings between the bank and De La Rue.

On the state of the machinery Khalwale , Konoin MP, Julius Kones, Nyatike MP, Omondi Anyanga and Kinangop MP, David Ngugi said the government is likely to get a raw deal given that the technology at the Ruaraka-based factory is old.

"The technology is archaic to the extent that more secure notes can’t be produced by the company. Which is why the notes ordered for by CBK are printed abroad. Why pay for obsolete technology?" asked Khalwale.

But acting Minister for Finance Robinson Githae said government would conduct an evaluation of the machinery to ensure their viability.

"I want to assure Kenyans that before we proceed we’ll look at the technology," said Githae. Finance PS James Kinyua also told the committee that a technical team was evaluating the machinery.

Mwala MP, Daniel Muoki and Marakwet West MP, Boaz Kaino said the government should buy a controlling stake in the company.

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