The High Court has temporarily suspended Central Banks' award of the new currency printing tender to British firm De La Rue International Ltd.
This was after activist Okiya Omtatah filed a petition for the award to be declared invalid, null and void, arguing "it is laced with open fraud and contemptuous disregard for the rule of law".
Omtatah claims the respondents deliberately contravened and violated Public Procurement and Asset Disposal Act, 2015; Public Procurement And Disposal Act, 2005; Fair Administrative Action Act, 2015; Central Bank of Kenya Act and Statutory Instruments Act, 2013.
"The award of the tender by the CBK to De La Rue International Limited, without strict adherence to the constitution and the law, has no consideration for public interest in getting value for money, and will result in the Kenyan taxpayer being condemned to pay rates way above the market rates for printing new design Kenyan currency banknotes," the petition reads in part.
Judge Justice Mwita, certifying the mater as urgent, restrained the CBK and its agents or any person purporting to act under the authority, from managing and signing a contract with De La Rue.
He directed that this is pending the inter-parties hearing and determination of the application.
CBK had awarded the tender of printing of new-design Kenya currency to De La Rue which was to commence on Thursday, December 14.
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But Omtatah said
in his application
that CBK unlawfully and deliberately awarded De La Rue a preference margin of 15 per cent to undercut competition.
He says this was in circumstances where De La Rue, a foreign owned and controlled company, was neither qualified as a preferred supplier nor the lowest bidder.
He said the award of the tender constituted a deliberate and contemptuous act of fraud on the public.
"To make matters worse, CBK deliberately ignored the conflict of interest in the fact that De La Rue International Limited, which won the tender to designed the new design Kenyan currency banknotes, after bidding a mere US$ 0.1, which was tantamount to offering a free service, and pre-rigged the process by removing important high-tech security features required by the CBK, has been awarded the tender to print and supply the same," he said.
Omtatah further argues CBK failed to curb cartel-like behaviour by awarding the tender to the same company earlier awarded that of designing notes.
"This means taxpayers who were the beneficiaries of the procurement will not be protected from price fixing," he said.
He said whereas the tender was to be awarded in two lots, being Lot 1 for denominations of Sh50 and Sh100; and Lot 2 for Sh200, 500 and 1000, the entire tender was awarded as though it constituted one lot.
He said: "There is huge public interest to be protected from counterfeiters by ensuring that the new design currency notes contain modern high-tech security features that make counterfeiting difficult as initially required by the CBK, but which were discreetly dropped at the design stage by De La Rue to tilt the tender in favour of the 3rd respondent."
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