The government has struck out the exclusive 10-year bank note printing contract condition for De La Rue, after signing a joint venture deal to buy 40 per cent stake in the firm yesterday.
Treasury signed the deal in which the government will pay Sh750 million for a joint venture with the UK currency printer at its Ruaraka-based factory, ending a stalemate that had rocked the
transaction for the last five years.
National Treasury CS Henry Rotich said concerns raised by the Parliamentary Accounts Committee and the public have been addressed, assuring Kenyans they will benefit under the current terms.
“The reason the transaction took long is because the government needed to address public concerns that arose during the process,” Rotich said during the signing in Nairobi yesterday.
PAC had opposed De La Rue’s move to tie the signing of the deal to an award of an exclusive 10-year bank note printing contract, which was first approved by Cabinet in 2011.
The committee had termed the condition as a scheme by De La Rue to have an exclusive currency printing contract without having to face competition.
The CS said De La Rue will now have to bid like any other company for a currency printing contract.
“I am happy to inform the public that this condition is no longer part of the transaction. De La Rue will have to undergo a competitive procurement process just like any other public entity,” Rotich said.
Rotich said the deal, which gives government a two positions in the firm's board, will create jobs, earn Kenyans dividends and ensure the company remains in Kenya.
He said the country will also benefit from profits earned from printing of currencies for other regional states, among other business ventures.
He said government will also have a voice in decision making at the factory.
“This transaction is strategic for Kenya becoming a regional financial services hub, enhance investor confidence in Kenya and employment retention and creation, as 300 highly skilled people are currently employed in the plant,” Rotich said.
De La Rue CEO Martin Sutherland said the Kenya facility will produce for both the domestic and export markets, directly employing 290 people locally.
“Our factory here in Nairobi will become one of De La Rue’s three global centers of excellence , and see a share of the £15 million (Sh2 billion) of investments we are making in new equipment,” Sutherland said.
Kenya is the only African country in which a De La Rue factory is based. Other factories locations are Malta, Sri Lanka and the UK.