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November 14, 2018

Swiss firm gets relief in Sh15bn stamps tender

SICPA Kenya director Michele Castegnaro before the National Assembly’s Public Investments Committee on October 4. PIC was probing the procurement of Excisable Goods Management System tender /HEZRON NJOROGE
SICPA Kenya director Michele Castegnaro before the National Assembly’s Public Investments Committee on October 4. PIC was probing the procurement of Excisable Goods Management System tender /HEZRON NJOROGE

SICPA Security Solutions, the Swiss firm at the heart of the controversial Sh15.91 billion excise duty stamps printing contract, is temporarily relieved after the regulatory authority gave the tender dealings a clean bill of health.

Public Procurement Regulatory Authority has given the go-ahead to the Kenya Revenue Authority to implement the multibillion-shilling Excise Goods Management System contract to SICPA to print, supply and deliver 12.8 billion excise duty stamps for five years.

PPRA director general Maurice Juma says the taxman was “reasonable” in engaging SICPA for extra scope of the electronic stamps contract, since the company installed software for verification of stamps which had proprietary features. “The Procurement was necessitated by the amendment of the Customs and Excise Regulations vide the Customs and Excise (Excisable Goods Management System) Regulations, 2013-Legal Notice No.110 of June 18, 2013,” Juma says in a letter, a copy of which has been sent to the Clerk of the National Assembly. 

“These regulations expanded the scope of products to be affixed with the stamps, thus increasing the need for stamps from 3.55 billion stamps to approximately 12.8 billion stamps.”

The tender will see Excise duty stamps extended to water, beer, soft beverages and cosmetics. Currently, the revenue security stamps are used on cigarettes, wines and spirits.

The House’s Public Investment Committee is investigating the international contract over alleged irregularities in the award of the tender advertised March 30, 2012. 

It attracted international firms namely: Edaps Consortium of Ukraine, Holostik India, De La Rue Currency and Security Print, Madras Security Printers Private and Authentic Inc.

SICPA Security Solutions was awarded the the five-year deal which was signed on April 18, 2013, for a period ending in March 2019.

The contract included provision of 3.5 billion security printed revenue stamps for five years, provision of track and trace software solution for the same period, and provision of integrated production accounting system for five years for tobacco, wine and spirits.

 Through legal notice No 110 of June 18, 2013, the number of stamps were increased from 3.5 billion to 12.5 billion owing to more products to be affixed with the stamps.

 The KRA, through direct procurement, opened fresh negotiations with SICPA in January 2015, resulting in the request to SICPA to submit another proposal with a discount based on the additional business arising from the expanded scope of the EGMS.

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