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Equity Bank moves to court over Mara gate collections row
Equity Bank in Kajiado. Narok County ended Equity Bank's contract to collect Maasai Mara get fees. Photo/FILE
Equity Bank has moved to court to block Narok County from terminating a contract for collection of access fees into Maasai Mara game reserve pending arbitration.
The bank says it has invested in the collection system and would suffer irreparable damages should the county be allowed to terminate the contract.
The agreement was terminated on June 25 after Narok issued a 14-day notice to end the deal on grounds that the collection system was defective and that the county was losing revenues, prompting it take up the responsibility of picking gate fees.
The former Narok County Council had signed a 10-year agreement with Equity two years ago through which the bank would earn a commission of seven per cent on a fixed annual revenue base of Sh1.5 billion.
The contract raised eyebrows because it meant that the council would still pay the bank Sh105 million annually even when revenue collected fell short of target.
Although Equity was the lowest bidder at Sh28 million, its commission rate was the most expensive.
“Unless the orders sought are granted, the plaintiff will suffer substantial and irreparable loss that would be incapable of being adequately remedied by an award for damages,” said John Njenga, Equity Bank legal services manager, in documents filed in court.
Equity Bank links the failure of park fees collection system on its migration to a new technology platform and shortage of cards that forced it to issue letters to the Maasai Mara visitors as a short term identification mode.
In response, Narok County through its administrator David Nasho reckons that the system has been down since April and that the park seized 700 cards that were found defective.
He says that Equity began moving to a new platform without its approval, prompting it to issue a termination notice on June 10.
“By midnight on June 24, 2013, the agreement stood terminated for breach as the plaintiff did not remedy the breach within the 14-day window effectively bringing to an end the contractual rights and obligations contained in the agreement with the plaintiff,” said Mr Nasho.
“The plaintiff not only failed to respond to the respondent’s concerns but even when it did, its explanation was shifty ranging from malfunctioning of the system to an error embedded in the smart cards. At times, it alluded to inability of the staff to competently operate the system. Yet such an explanation is utterly ridiculous.”
Narok says Equity’s request for arbitration on June 25 was time barred given that it happened outside the 14-day window.
Previously, the council used an electronic ticketing system for visitors into the park.
Data from the 2013 Economic Survey shows that the number of visitors to the game reserve dropped by 26 per cent to 102,000 last year as tourism revenues fell by two per cent to Sh96.2 billion.
Earlier this month, tourists were stranded at the Maasai Mara game reserve gate when county revenue officials carried out an impromptu search following a shortage of smart cards at the bank.
The bank had issued tour drivers with letters to use as passes, a move that was questioned by revenue officials.
The issues arose after the county lost more than Sh9 million in the last two months through rackets by tour drivers who used faulty e-ticketing cards to access the game reserve.
The Auditor -General wanted the 10-year contract renegotiated to protect the Narok County Council from revenue losses.
