We trust this letter finds you well and in good health. You will notice that we did not object your continued stay in office, beyond the mandatory age of 60, not because we agreed with the move but as a goodwill gesture not to disrupt operations of the Authority. It remains an illegality, though.
We have, however, not witnessed any form of goodwill on your part to Cofek and Kenyan consumers at large. Your insistence on scandal-ridden SICPA Global to undertake the contentious EGMS cannot go unchallenged.
As you will recall, Cofek and other parties appeared before the Parliamentary Public Investment Committee (PIC) and opposed the move on September 29, 2016. We later, October 11, 2016 wrote you a letter requesting for details on EGMS. You neither acknowledged nor replied to the same, to date.
We are, therefore, extremely shocked to learn of your notice contained in the dailies of October 3, 2017 purporting that EGMS will take effect on November 1, 2017. In our submissions to the PIC we noted, and hereby reaffirm, that;
“We have never been involved in any stakeholder consultation between KRA or any of its’ partners on EGMS. It’s a scandal in the making. It’s against consumer interest as it is meant to escalate costs of consumer goods while denying government the much-needed revenue. It must be stopped. Instead of losing Sh1.50 per item, such money would do better to be provided for enhancing consumer awareness, which will be more cost-effective and sustainable than the proposed EGMS system.
“Parliament must not rubber stamp shadowy initiatives by cartels. SICPA scandal is a replica of the infamous Pyramids Scheme scam (with 93,485 victims and a direct loss of Sh2.4 bn still not compensated). It’s sad that the The Nyenze Taskforce Report of 2010 has never been implemented to date. It’s for this reason that the Pyramids Scheme scam and the EGMS scandal could easily be linked.
“The purported legal framework enabling the EGMS is inconsistent with the Constitution at Article 94(5). The direct procurement by KRA and failure to allow for competitive bidding and procurement unmasks the scandal that must be fully blamed on KRA and the National Treasury. In this connection, KRA Commissioner General Mr John Njiraini must take personal responsibility and resign. Owing to failed privatization of public investments, the long serving Investment Secretary Ms Esther Koimett must equally exit. Article 95(2)(4)(c) allows Parliament to invoke such powers compelling appointing authorities to act.
“Its within the public domain that SICPA is a serial driver of fraudulent activities in corruption in Brazil, Morroco, Albania and the Philippines. SICPA has been mired in corruption in countries it had won tenders. The pretense by KRA not to have been aware and failure to conducted background checks on a company they had single-sourced is complicity. We must save the country from additional costs of production and higher consumer prices.
Our letter of October 11, 2016 sought answers on 9 questions which you ignored. Among other issues, we needed the “Tendering history and process that resulted in SICPA Security being awarded; Why an additional Sh1.50 (we hear it has now been scaled down to Sh0.6)is to be paid to the awardee over and above the Excise Tax, to be shouldered by the consumer.
From the foregoing, and aware of your lack of cooperation, we demand as follows;
- That you immediately revoke the notice purporting to allow the discredited SICPA Security to rip off consumers on excise stamps on bottled water, juices, soda, other non-alcoholic beverages and cosmetics
- KRA and SICPA staff be stopped from accessing production lines for affected goods with the intention of purported guidelines compelling compliance
- That KRA explain why SICPA Security was single-sourced and pre-paid for the said assignment
- Demonstrate to what level EGMS was exempted from provisions of Article 10 on stakeholder and public participation
- Demonstrate why a local firm, competitively sourced, could not have been considered in line with Public Procurement and Disposal Act and why should Kenyan jobs be exported to Switzerland.
- Why KRA want to proceed with the tender yet it was challenged by the PIC of the National Assembly and that the PIC report is yet to be tabled considering the new PIC is yet to be re-constituted
- Why an everlasting (indefinite) contract must be outsourced instead of being managed in-house.
TAKE NOTICE that if these demands are not adequately responded to, within 7 days with effect from the date hereof, we will proceed to seek judicial action against you and the National Treasury without further notice. Thank you.
CC: Mr Henry K. Rotich, Cabinet Secretary, The National Treasury