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December 18, 2018

New currency on course as Court of Appeal upholds De La Rue tender

Fifty shillings notes in an undated photo. /FILE
Fifty shillings notes in an undated photo. /FILE

Central Bank of Kenya can now proceed with the printing of new-look currency after the Appeals Court on Friday held that the De La Rue tender was above board.

The CBK had appealed the cancellation of the Sh10 million annual contract. Justice George Odunga on April 12 quashed the tender saying it was awarded unlawfully.

Odunga's ruling followed a suit by Activist Okiya Omtatah who argued that De La Rue did not qualify for the 15 per cent margin of preference, the basis on which it won the tender.

The activist argued that the British firm was not a preferred local supplier as it was not registered in Kenya as such.

Read: High Court suspends De La Rue's new currency printing tender 

On January 12, the Public Procurement Administrative Review Board (PPARB) cancelled the tender saying CBK erred by applying the 15 per cent margin preference.

The latter is reserved only for local firms.

Read: Court halts procurement board's termination of CBK new currency tender

More: CBK, De La Rue in battle to win new currency tender

Swedish firm Crane AB was the least evaluated in price score during the bidding process.

Other firms interested in the lucrative contract for printing new notes included Giesecke and Devrient (German), and Oberthur Fiduciaire of France.

Crane AB filed the case before the board and accused CBK of flouting the law and lacking transparency in awarding the lucrative deal to De La Rue International Ltd.

The PPARB and the court on both occasions directed the CBK to undertake a fresh evaluation of all tenders submitted by all the bidders.

The CBK, however, challenged the decision at the Appeals Court leading to the Friday’s ruling.

The bank argued that De La Rue was locally registered but only sub-contracted its affiliate De La Rue Kenya for in the printing contract.

It also said the Crane AB filed the case outside the 14 day period stipulated by law and that the board did not have jurisdiction to hear the matter.

De La Rue, in a statement, welcomed the Appeals Court ruling saying it was delighted with the verdict.

"We have maintained throughout the process that the CBK had run a proper, fair and transparent procurement, and the court has today confirmed that view, as well as dismissing baseless accusations of collusion out of hand," marketing director Robin Mackenzie said in a statement.

De La Rue has had a presence in Kenya for over 25 years, a fact the court relied on in its ruling to dismiss the accusation that it was unfavorably granted the 15 per cent margin preference.

Mackenzie said the firm is currently investing Sh286 million in the expansion of its site in Ruaraka on Thika Road to strengthen and underpin its local operations.

"This is part of a long term investment of Shh1.4 billion to upgrade the site to become a regional hub for East Africa and the wider continent and a Global Centre of Excellence for De La Rue," Mackenzie said.

According to CBK estimates, the replacement of the old currency notes will cost Sh18 billion.

The Constitution-compliant new generation bank notes will be in 50, 100, 200, 500 and 1,000 shilling denominations.

Their introduction will be followed by phased withdrawal of the old generation notes.

Article 231(4) of the Constitution outlaws currency bearing portraits and images of individuals.

However, such features remain on notes and coins currently in circulation after CBK missed the planned August 2015 deadline in violation of the clause.

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