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Setback as De La Rue loses notes printing suit

DELA RUE

The De La Rue money printing facility in Nairobi. Inset is CBK Governor Patrick Njoroge. FILE PHOTO

British security printing firm De La Rue International must wait longer to know whether it will retain the Sh10 billion-a-year tender to print Kenya’s new-look currency.

The setback came after the High Court nullified the past bidding process that awarded De La Rue the mega contract on the basis of a 15 per cent preferential treatment score.

Justice George Odunga threw the ball back to the Central Bank of Kenya (CBK) when he delivered a judgment in a case filed by activist Okiya Omtatah.

Mr Omtatah had moved to court against the award of the multi-billion shilling contract arguing that De La Rue did not qualify for the 15 per cent margin of preference because it is not a preferred supplier under Kenyan law.

The CBK is required to evaluate the bids afresh.

Justice Odunga delivered his judgment on Mr Omtatah’s petition a few hours after he made a separate decision on the same matter in favour of De La Rue.

The earlier decision, which Justice Pauline Nyamweya read on behalf of Justice Odunga, had quashed the procurement watchdog’s decision to allow an appeal that a losing bidder had filed against the award of the contract to De La Rue, giving the UK security printer a glimpse of hope.

Justice Odunga had found that the Public Procurement Administrative Review Board (PPARB) lacked jurisdiction to entertain Crane AB’s application since the firm was not party to the tendering process.

PPARB on January 8 terminated the De La Rue contract after a week-long hearing in which the Swedish firm Crane AB accused the CBK of breaching the law in awarding a 15 per cent margin preference to the British firm for having local shareholding.

Kenya stranglehold

The review board had directed the CBK to make a fresh evaluation of the tenders submitted to it within a fortnight, prompting the CBK and De La Rue to challenge the decision in court.

De La Rue has had a stranglehold on Kenya’s lucrative money printing business except for the period between 1966 and 1985 when another UK firm, Bradbury Wilkinson, did the job.

De La Rue then acquired Bradbury Wilkinson to become the dominant feature in the currency printing market.

The CBK has been in a hurry to award the contract in order to comply with the constitutional requirement to remove personalities’ images from the notes.

Justice Odunga observed that the firm that was pre-qualified for the restricted tender was Crane Currency and not Crane AB, the company that submitted the request for review and found that the board was wrong in entertaining a request for review by a firm that was not pre-qualified.

Crane AB had separately filed an appeal at the High Court, faulting the PPARB for failing to directly award it the tender as it was the lowest bidder.

The High Court consolidated the three requests for review by Crane AB, the CBK and De La Rue and heard them together.

Surprise move

Crane AB, in a surprising move, later applied for leave to withdraw its case, without offering any reasons for the decision.

The CBK opposed Crane AB’s application, arguing that the court should be allowed to make a final determination given the adverse allegations that had been made against it.

For its part, De La Rue argued that it would only consider the option if Mr Omtatah, who had also filed separate petition, withdrew his case because he had made allegations that were similar to Crane AB’s.

Justice Odunga yesterday rejected the application by Crane AB to leave the suit but accepted their request to drop prayers to be awarded the tender, noting that ‘parties should not be forced to pursue orders they don’t want to’.

The judge ruled that the application for withdrawal was made long after the case had been filed and heard and directed the Swiss firm to pay the cost of the suit.

READ: Swedish firm to drop cash printing suit

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