New number plates delayed as tender row breaks out

A fresh multi-billion-shilling tender battle has broken out at the Ministry of Interior between contractors fighting to provide Kenyan vehicles with new hi-tech number plates meant to assist police track down car thieves, terrorists and other criminals in real time.

The first phase of the project was supposed to be rolled out in the next two weeks targeting six million vehicles but it now seems that may not happen this year as the dispute has given rise to legal challenges.

The Public Procurement Administrative Review Board, which is working alongside the Public Procurement Oversight Authority, has now stopped the government from signing any contracts, even though the tenders have been awarded, until all irregularities have been resolved to ensure no public money is lost.

The smart number plates are a critical component of a wider security plan — the integrated automated management system — in which a new generation of driving licences will also be introduced.

Such licences are capable of carrying the driver’s history which can be accessed by police and insurance companies, among other agencies, by simply inserting the card in a portable hand-held machine.

And, according to proposals for the vehicle registration project, a simple screening over a number plate with the machine would produce the name of the owner of the vehicle, the registration number, engine and chassis numbers and the particulars of previous owners.

Then there is a security sticker that would be displayed on the windscreen that would also enable the authorities to access details by scanning using hand-held devices.

The smart number plates are expected to give the police an advantage in tracking down stolen vehicles, as well as those used to commit other crimes like carjacking and hit-and-run accidents.

ALLEGATIONS OF IMPROPRIETY

But in a letter to the Interior ministry seen by the Sunday Nation, the procurement authority stopped the process until allegations of impropriety raised by aggrieved parties in the tendering process are resolved.

“Please note that according to the Procurement Act, the procurement process should be stopped and no contract subject to the regulations can be signed between the procuring entity and the successful tenderer until the appeal has been finalised.”

The procurement authority notes that this relates to “supply and delivery of motorised vehicle number plate blanks” and “supply and delivery of mortised number plates hot stamping foils”.

These are the main components for making the new design number plates.

The Sunday Nation has also learnt that the board is also reviewing a tender for security stickers on vehicle windscreens, after a separate contract was awarded by the National Transport and Safety Authority.

The tender for the blank plates was awarded to German company EHA Hoffman International GmbH at $6.9 million (Sh690 million).

The one for the supply of number plate hot stamping foils was given to Tonnjes Card International GmbH, also from Germany, and EHA Hoffman at $20.7 million (Sh2 billion).

In total, the tender for the plates alone is at least Sh2.6 billion.

Interior ministry spokesman Mwenda Njoka said: “The third generation of number plates was supposed to be introduced in Kenya by September (next month) but because of these controversies, it will not be happening. It is unlikely to happen this year unless all the issues have been resolved.”

The modernisation is long overdue because it was initially mooted in 2004 but has dragged due to tender wrangles.

When the review board cancelled award of the contracts, it also ordered that re-evaluation be done and the contract awarded gives value for money while ensuring that quality is not compromised.

The tenders attracted 13 bidders but only seven were considered serious contenders.

Besides the two that were given the tenders, others are Utal sp.z (Poland), Knieurium bv (Netherlands), Motonguvu EA (Kenya), Tropical Kenya Ltd and Abcos Industries (Kenya).

The Kenyan firms took part as local agents of foreign firms since the technology is not available locally.

The review board made the decision to stop the contract on July 17.

In the ruling, the review board noted that the ministry did not carry out due diligence before awarding the tenders, an act that could put taxpayers’ money at risk in the event the winners fail to deliver top-notch services as promised on paper.

The ruling seen by the Sunday Nation said: “The board, therefore, finds that further steps taken by the tender evaluation committee in the nature of due diligence after an award had been made was inappropriate because the committee had made a recommendation and had issued final letters of award to the successful bidders yet no due diligence had been carried out and the board wonders what would have happened if the successful bidders or any of them had turned out not to be qualified.”

LOWEST PRICE

The review board was specifically concerned because although the winner had quoted the lowest price, it was by far not comparable to all the other bidders, thus raising suspicions.

Due diligence, usually done by visiting the sites of manufacturing companies, is important to protect the government from briefcase outfits that have no capacity to deliver.

The board also noted: “Overall tender evaluation criteria provided for in the tender document, the procuring entity was required to make site visits to all bidders previous clients and the manufacturing sites as a means of determining substantial responsiveness of the bidders.”

It ordered that procuring teams from the ministry should visit manufacturing sites of the companies that bid.

TECHNICAL COMMITTEES

The team has visited EHA Hoffman and Tonnjes but is yet to visit the other sites.

The Sunday Nation has since established that there is a conflict between the technical committee, in this case of the Kenya Prisons Enterprises led by director Patrick Kariri, and procurement officials at the ministry.

Sources, who spoke in confidence, say some procurement officials are angry that they are being left out in trips abroad to manufacturing sites.

The recent planned visit to Germany, however, aborted after the embassy in Nairobi gave visas for only three days, from August 18 to August 20, while the application had requested 14 days.

In its ruling the review said: “The award for the tender is hereby annulled. The procuring entity (the prisons enterprise) is directed to carry out fresh re-evaluation in respect of the two tenders and complete the entire exercise, including making awards, within 30 days.”

At the review board, the Interior ministry was to answer queries of irregularity raised by Tropical Technology Ltd. Representatives of EHA Hoffman, Manchester Outfitters, Knieriem bv and Safenet Technologies sat at the hearing as interested parties.

Tropical Technology is the company that supplies the current vehicle number plates and had bid to supply the modern ones.

Earlier, the company won the tender to supply, install and commission machines that will produce the smart plates.

The machines were installed at Kamiti Maximum Prison, where the production will be taking place.

The machines were tested by the Public Works department and given a clean bill of health.

Tropical Technologies, acting for Mulschard of Germany, shipped in the machine but it is yet to be commissioned because technicians have not been trained on how to use it.

However, the company sought to bring in the plates too so that the German company could guarantee a warranty in case of a breakdown.

But the ministry, in awarding the plates tender to another company, said the issue of the plates should not affect the warranty.

Mr Njoka said: “The plates are just consumables and I don’t think there should be a restriction tied to the warranty. We hope this matter will be resolved soon by the Public Procurement Administrative Review Board.”

The tender too was characterised by misunderstanding because after the machine was delivered, there had to be an addendum to the initial contract of Sh15 million.

Tropical technologies and the ministry agreed that the government should meet the cost of training materials that are to be used by potential technicians, in this case inmates at Kamiti prison.

The migration has, however, kicked out private investors who wanted to take over production of plates from prisons.

Suspended Transport Cabinet Secretary Michael Kamau unveiled the new-look plates earlier in the year but the venture has nevertheless not materialised.