We were awarded excise stamps contract fairly, says Swiss firm

A Swiss firm has dismissed allegations that it was irregularly awarded a Sh162 billion revenue systems tender.

Switzerland-based SICPA Security Solutions Ltd says it was awarded the Excisable Goods Management Systems (EGMS) contract fairly by the Kenya Revenue Authority (KRA).

The company’s regional vice president Michele Castegnaro said the company has no business with goods imported into the country since it only supports KRA in marking excisable goods in the Kenyan market. “This includes alcohol, cigarettes and other products under the KRA guidance and orders. Our role within EGMS is first and foremost helping ensure tax compliance for excise tax collection purposes and not fighting counterfeits and illicit trade, a role that other agencies in Kenya are responsible for,” Castegnaro said.

CORD leader Raila Odinga last week claimed SICPA Solutions has pocketed billions of shillings through revenue collected on imports. The former PM said the firm is currently being investigated for shady deals in other countries.

However, while answering questions from the Adan Keynan-led Public investments Committee, SICPA executives said there are certain parties who resist the application of the systems powered by SICPA technologies.

“This Opposition may express itself in various ways, including in vexatious action and unfounded libellous allegations. SICPA has never been convicted of any offence in relation to unethical activities in any of its subsidiaries worldwide,” said SICPA Executive Bruno Frentzel in a letter addressed to PIC.

SICPA initially signed the contract in December 2012. The original contract was for making excise stamps for tobacco products, wines and spirits but the Treasury, through a Legal Notice number 110 of June 2013, increased the scope to cover beer, bottled water and soft drinks.

The five-year contract worth Euros 20,341,464 was originally to provide 3.55 billion stamps a year but this was later reviewed to Euros 158,213,898 (Sh17.8 billion at current exchange rates) for 12.87 billion stamps. SICPA says it bears all upfront investments and shelters KRA from line marking automation costs, which was the core reason for restructuring the contract, whose request came from the taxman. The contract sets the cost per stamp at Sh1.50.

Recently, the Public Procurement Oversight Authority (PPOA) supported the taxman for awarding the tender to the Swiss company.

PPOA Director General Maurice Juma said engaging the Swiss firm in provision of additional stamps was a reasonable option. “Management of two separate contracts for the same services and goods could have posed contract management challenges such as aligning delivery schedules and compatibility of services and associated goods,” said Juma in a letter to Parliament’s PIC.

The system was in use before SICPA won the tender and had previously been won by a company known as Madras.