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https://www.ft.com/content/8805cc34-f489-11e7-88f7-5465a6ce1a00
John Aglionby
YESTERDAY 0
De La Rue, the UK paper goods maker, has had its contract to print Kenya’s new bank notes cancelled after the country’s procurement watchdog ruled that the central bank had awarded it unlawfully.
The Public Procurement Administrative Review Board said De La Rue, listed on the FTSE 250 in London, should not have received a 15 per cent preference margin on tender, which is given to bidders of services when goods are manufactured domestically. Without the preference margin, De La Rue’s contract would be more expensive to the taxpayer.
De La Rue has a banknote and security printing facility in Kenya, its only one in Africa. Lawyers for the central bank argued that De La Rue’s bid qualified for the preference margin because the majority of the notes would be printed at the facility.
However, the board ruled that because the contract was awarded to De La Rue International, the preference margin should not have been applied.
It ordered that all four tenders should be re-evaluated within 14 days. The three other bidders were Giesecke & Devrient of Germany, Sweden’s Crane Currency and Oberthur Fiduciaire of France.
The Central Bank of Kenya said it would appeal against the decision to the high court, arguing that in the circumstances the ownership of the winning bid was irrelevant.
De La Rue also said it would appeal against the procurement board’s decision.
Details of the contract have not been released but Patrick Njoroge, the central bank governor, has said that the new banknotes will cost Ks18bn ($174m).
Kenya has had to reprint its banknotes because the existing stock violates the 2010 constitution that outlaws the use of images of individuals. Kenya’s banknotes currently feature images of Jomo Kenyatta, the country’s first president.
De La Rue’s adjusted profit before tax last year was flat at £58.7m. But revenue at its currency business, which provides about three-quarters of its total, fell 1 per cent as a high-value contract came to an end. |
