Firm claims Sh1.3bn before security system is rolled out

PHOTO | PSCU President Kenyatta, Cabinet Secretary Joseph ole Lenku (right) and Safaricom CEO Bob Collymore during a briefing on the implementation of an Integrated Public Safety and Security System on May 14, 2014.

What you need to know:

  • Safaricom is to build for the National Police Service in Nairobi and Mombasa Sh15 billion security solution
  • Despite meetings with the different security departments, TRL had not entered a contract with any of them to build a network.

A little-known Kenyan company is demanding to be paid Sh1.3 billion before the government executes a police communications and surveillance system contract awarded to Safaricom.

Tetra Radio Limited (TRL), which claims to have won a tender to build a similar system in 2002, wants the government to either pay it $15 million (Sh1.3 billion) for alleged breach of contract or the firm be enjoined in the Sh15bn security solution Safaricom is to build for the National Police Service in Nairobi and Mombasa.

But questions abound about the company’s claim of having won the tender given that the licence it applied for was for a commercial network while Safaricom’s contract is specifically to put up a network for the police.

Further questions have been raised over the validity of the company’s licence since it is yet to pay the stipulated fee of $5.2 million (Sh452 million), more than a decade after the alleged issue date. In what appears to be a well-calculated scheme, TRL claims to be the bona fide holder of a licence to roll out a security system in Kenya and is proposing that Safaricom acquires it first from them before going on with the security project.

“TRL is ready to surrender its licence award and withdraw all its court cases in exchange for reimbursement of all its costs and compensation for reasonable profit expectation. We consider this to be in the range of $15 million (Sh1.3 billion),” it says in a document seen by the Sunday Nation.

“However, this would honestly be difficult to implement as it will require Communications Commission of Kenya (CCK) to offer compensation to TRL, which will in turn provoke audit queries and invite corruption allegations and parliamentary inquiry. Unless a way can be found to make this work, TRL considers this to be a risky option,” adds the document.

The demand is seen as a crafty attempt by the company to make money from a licence it questionably acquired but has yet to make a profit from it 12 years later.

In 2002, TRL, which is associated with a prominent Nairobi lawyer, applied for a tender for the construction, operation and provision of systems and services for a commercial trunked radio communications network following an advertisement by the CCK.

The licence would enable the winning bidder to roll out a countrywide digital system that would mop up all the analogue walkie-talkies, migrating them to a more secure digital platform.

However, the company failed to pay the requisite licence fee of Sh452 million and CCK cancelled the tender. Following intense lobbying, the company was given a second chance to pay the licence fees but failed yet again, prompting a second cancellation.

TRL then went to court to contest the cancellation and acquired a stay order through Judge Jean Gacheche. CCK has since appealed the decision. Justice Gacheche was dismissed from the Judiciary.

The company has also filed a different case demanding compensation from CCK for damages and alleged loss of business opportunity.  TRL has now threatened to stop the execution of Safaricom’s tender through the court if consultations are not held urgently to decide on compensation.

“TRL considers that the most attractive option is to invite government’s favoured contractor (Safaricom) to purchase TRL and then use the licence to roll out the security system. This is attractive because it will allow for the settlement of all outstanding cases filed by or related to TRL in a neat manner,” the document reads.

The company said it wants consultations held urgently as it was “preparing a memorandum to the Budget Committee of Parliament to highlight how the government is exposing to Anglo-Leasing type losses and liabilities on account of failure to honour contracts, which eventually results in huge damages and penalties being imposed on the taxpayer”.

However, it will be difficult to clearly bring out the connection between the two contracts given that one is for a commercial network while the other is an initiative of the government to build a system for the security forces.

Despite meetings with the different security departments, TRL had not entered a contract with any of them to build a network.

“It is hoped that the rather unnecessary machinations which have been employed to attempt to frustrate TRL from being part of the solution in this process will stop and that a practical way forward is agreed. TRL is ready to embark on immediate negotiations if called upon to do so,” the company says.