City Hall has terminated the contract of revenue collecting company JamboPay, citing noncollaboration.
JamboPay has been collecting revenue on behalf of City Hall for more than five years. Its contract was recently extended for two months.
City Hall on Saturday said the company had refused to hand over the key components; an application known as USSD shortcode and the paybill account.
Acting county secretary Pauline Kahiga said JamboPay had not been collaborating.
In a statement read on Kahiga's behalf by finance executive Charles Kerich, the county said the company failed to comply with the agreements of the deal.
In January, JamboPay announced it won’t be renewing the contract with City Hall, citing political interference and bad publicity.
Prior to the expiry of the contract in April, the county government had engaged the firm to ensure seamless transition and continuity of service from the private provider to an internally managed system.
“The engagements necessitated an initial contract extension of 30 days. During this extension period, the county accelerated efforts to finalise the migration process,” Kerich said.
“As part of this, JamboPay was required to hand over certain key components. These included the company releasing a key application known as a USSD shortcode and the Paybill account.”
City Hall said JamboPay had not relinquished the components, causing service interruption. But the county gave JamboPay another 30-day extension which lapsed last week on Friday.
Kerich said JamboPay did not terminate the contract, contrary to reports the firm had opted out.
“Although initial negotiations allowed for up to a 90-day extension period, and given our readiness to implement our internally-managed revenue collection system, we made a decision not to extend this contract further,” Kerich said.
He said there will be an exit process and an official handover of all data, assets and reports. “We expect, for instance, that all money that has been deposited by Nairobi residents in JamboPay’s wallet should be reimbursed to the owners,” Kerich said.
“We assure Nairobi residents that every effort will be made to ensure a smooth transition.”
City Hall will from today start collecting revenues using its internal systems.
"We will identify the problems the system has so we can address them. We will also get another USSD and paybill account to ensure continuity of services," Kerich said.
Former ICT chief officer Halkano Waqo had earlier said the county government will set up its own revenue collection system at the start of the 2019-20 financial year which begins next month. Waqo said the county will have set up its own Integrated City Revenue Management System. A budget of Sh205 million had been set aside for the project.
JamboPay had been working on the Local Authority Integrated Financial Operations Management System, which Waqo said was difficult to run and not up-to-date. The Laifom system was aimed at addressing challenges faced by local authorities but lacked proper record keeping.
"Laifom is very cumbersome, our next system is going to be modern and simplified so anybody can fit in without customisation,” Waqo said.
Last month, it emerged that lack of a visualisation software and smart network licence delayed the set-up the new system.
