Friday, September 19, 2008



September 18 2008
Daily Nation
Nairobi, Kenya

The cash minting company alleged to be at the centre of the removal of deputy Central Bank governor Jacinta Mwatela is under investigations by Britain’s Serious Fraud Office.

The Ruaraka-based De la Rue Currency and Security Print Ltd, a subsidiary of a British company in Hampshire, was singled out by Mrs Mwatela for being awarded a tender illegally.

Mrs Mwatela, who was the head of the bank’s tender committee said the contract between the Government and De La Rue was illegal and against the Public Procurement Act.

A spokeswoman for Serious Fraud Office (SFO) yesterday told the Nation that the organisation was investigating a number of the UK company’s overseas activities but refused to say whether or not De La Rue’s Kenya operations were amongst them.

The spokeswoman said she was “not at liberty to say” whether or not current inquiries into De La Rue included Kenya as the matter was “under investigation and we are therefore limited as to what we can and cannot put out into the public domain.”

The parliamentary Public Accounts Committee headed by Ikolomani MP Bonny Khalwale has launched investigations into the De La Rue tender with a view to establishing if Mrs Mwatela’s woes were linked to it.

The contract involves the printing of a new generation of bank notes for the Central Bank of Kenya.

Recently, Safina Party leader Paul Muite said the SFO “should investigate whether there has been any corruption in terms of kickback in printing currency in the Moi and Kibaki administrations.”

In 2005, the British firm was at the centre of yet another storm over a contract to print money for a two-year period without going through the procurement process.

This came just two years after the Government had cancelled a 10-year contract signed in 2002 by President Moi’s administration to print money for the country. It termed the 10-year contract “fishy”.

In August 2005, CBK confirmed that De la Rue had been paid a staggering Sh3.270 billion in March 2003 to print 780 million banknotes.

The bank also disclosed that the same firm was paid Sh1.194 billion to supply 300 million bank notes in July 2005. Both contracts were awarded without competitive bidding.

While cancelling the De la Rue contract in March 2003, CBK said the currency printing firm precluded it from enjoying cost and quality benefits arising from competitive bidding.

Conservative estimates put the figure so far paid to the company to anything between Sh80 billion to Sh100 billion.

In December 2004, CBK invited international bids from five European countries to take part in a restricted tender that closed on April 18, 2005.

At the closure of business, bids had been received from Francois Charles Oberthur ($98 million), Orell Fussli ($104 million), De La Rue ($139 million) and Giesecke & Devrient ($150 million).

The French firm was the lowest bidder while De la Rue was the second highest.

But on May 16 2005, CBK cancelled the tender citing non-responsiveness of two bidders which they said adversely affected the competitiveness of the tenderOn June 6, 2005, CBK readvertised the tender with the closing date set for July 18.

It emerged that a one-year tender had been extended to De la Rue on July 14, 2005.

Then Finance minister David Mwiraria was put on the spot over the tender with questions being raised on why quotations were not called from all bidders for the single sourced tender.

Mr Mwiraria blamed the procurement officers for bungling the tender process, while CBK saw the lengthy procurement process as the problem.
The extension given to De La Rue in 2005 was the second in three years since Kibaki came to power in January 2003.