Crisis over billion-shilling row could stall Mara operations

By Kenneth Kwama

Narok, Kenya: Intrigues at Narok County Council have left the local authority broke and grappling with crippling legal suits worth billions of shillings.

It has emerged that a conflict of interest on part of some top county officials could have influenced a decision to cancel a pre-existing revenue collections contract with a local bank.

Majority leader at Narok County Assembly Stephen Kudate told The Standard that the council had no money. This is despite documentation in our possession showing that Equity Bank collected Sh1.57 billion from visitors to the park last year on behalf of the former council.

“There is no money in the account. You should ask the former Clerk to the council, Pius Mutemi and his treasurer, Wanyonyi Mukhisa if they know anything about the money,” Kudate said.

The revelations have sparked fears of a serious problem within the system, with apprehension growing that the county might lose out on a bulk of the Sh500 million it often collects from visitors to the park between the high season months of July and September.

Ward representative Letulal ole Masikonde backed the claims, saying they had been informed there was a Sh14 million deficit in the county’s accounts. He blamed the management for failing to admit the dispute, saying that operations at the park could be halted if it is not resolved in good time.

 “The account at Equity was for collections, but the money was transferred to an operations account at National Bank. We don’t know what happened after this,” said Masikonde.

Mutemi did not respond to several enquiries about the issue, but Mukhisa told The Standard that no money was lost and that any attempt to insinuate so is a diversionary tactic.

“What is happening in Narok is a battle between the analogues and the digital. There are people with deep personal interest in all of these issues. While some people want change, others are resistant,” said Mukhisa.

Narok County representatives are now split over the decision to cancel the contract with Equity Bank at the onset of the high tourist arrivals season, with some accusing governor Samuel Tunai of trashing the agreement to create room for a firm in which he is a director to take over management of the park.

“A company called Mara Conservancy in which Tunai has interest in signed a management deal with the Council of Transmara a few years ago to manage a part of the Maasai Mara Game Reserve referred to as the Mara Triangle and he has been pushing for the firm to be awarded entire control of the park,” said a county representative who requested not to be named because of the sensitivity of the matter.

The governor who had promised to talk to The Standard after several days of enquiries failed to do so.

The Standard dug into Mara Conservancy’s past to find intimate connections between the firm called Mara Conservancy, the governor and his brother, Kijabe Kuya Tonai who is a former councillor.

According to documents in our possession, Mara Conservancy is a private company based in Nairobi. The governor is one of the signatories who penned his name to the contract with Transmara County Council on behalf of the conservancy.

The deal allowed the conservancy management rights over the Mara Triangle and was signed on April 12, 2005. It owes in no small part to the governor’s unyielding influence within the county.

Contract length

One of the reasons cited by Narok County officials for cancelling the Equity deal was the length of the contract. They said that the 10 years revenue collections period granted to the bank was too long.

Incidentally, the deal that awarded the governor’s company management rights over parts of the park is also stipulated to last 10 years.

“The term of this agreement shall commence with effect from the Commencement Date and shall, subject to clause 5.2, continue for a period of 10 years unless terminated earlier in any circumstances provided below,” states part of the agreement.

The agreement can only be terminated if the conservancy breaches its obligations or if the two parties reach a mutual agreement to do so. It proceeds to state that the ten-year term may be extended for another five years if the conservancy so wishes.”

Another point of contention was how to share revenue. Narok County officials stated that the seven per cent of total revenue collected retainer for Equity was too prohibitive, but clause 8.3 sub-section (a) of a similar deal signed between the Mara Conservancy and the council shows the firm associated with the governor retains up to 45 per cent of the total revenue it collects from the Mara Triangle.

Already, the intrigues have forced away a number of tourists who flew into the country after booking their holidays in advance through Equity Bank’s prepaid smart card system to alternative destinations such as Serengeti in Tanzania and South Africa, after they were asked to either pay afresh or turned away at the gates to the park.

Revenue loss

Equity Bank has threatened to sue Narok County over Sh1.2 billion in revenue loss due to the abrupt cancellation of the deal. Also, some industry stakeholders say the county’s management could find itself mired in other lawsuits filed by disgruntled tourists denied entry to the park despite paying through the bank.

Some tour operators whose clients paid through Equity, but who had been denied entry into Maasai Mara said they were losing out on business as a result of the standoff.

A Nairobi-based tour operator who requested not to be named for fear of victimisation said that eight of their clients diverted to Serengeti in Tanzania after experiencing hiccups with the system.

“The issue is between the bank and the county officials and tourists should not be made to suffer. It is in the interest of tourism that the issue be resolved in the fastest way possible to facilitate smooth operations at the park. The negative publicity is affecting business,” said Kenya Tourists Board Managing Director  Muriithi Ndegwa.

Arbitration

Investigations by various State  agencies, including a Parliamentary Committee and the Auditor-General’s office noted that while the smart card system was working well and increased revenue collections, certain clauses in the contract needed to be amended.

The investigations pointed out that the duration of the contract, sealed — 10 years was too long.

Equity Bank went to court after the Narok County Government abruptly terminated the contract on June 10.

A fortnight ago, High Court judge Jonathan Havelock ruled that the two parties — the bank and the County — Government should go for arbitration as provided for in the contract document.

Business rivalry

But the presence of Mara Conservancy in the whole deal and the fact that it is already managing gate collections on the one side of the game reserve that is not covered by the contract with the Equity Bank, could complicate issues.

It has also raised questions of business rivalry between the bank and the private company.

There are also possible issues of conflict of interest in the dispute between the bank and the Narok County Government. The decision to award Equity Bank the contract to automate revenue collection at Masai Mara by then Narok County Council was reached in November 2010

This was after realisation that the council was losing up to 60 per cent of the revenue available due to out-dated manual collection system that left big room for fraud and inefficiency.

Five years earlier, then Local Government Ministry had directed civic authorities to automate their revenue collections systems for efficiency and accountability.

The Kenya Anti-Corruption Commission (KACC) was called in to investigate alleged corruption in award of the automation contract to Equity Bank. But after the evaluation of the evidence provided, on February 25, 2011, KACC wrote to the County Clerk of the Narok Country Council to state its findings.

“The Commission has completed analysis of the file touching on procurement of the Smart card (e-Ticketing) and has found no irregularity in the steps taken so far. The original file is hereby returned to you for necessary action,” stated the agency.