Travel firms fear Sh13billion loss in tendering process

By NICHOLAS WAITATHU

NAIROBI, KENYA: Local Agents offering travel services to ministries, parastatals  and Semi–Autonomous Government Agencies (SAGAs) are likely to lose business worth up to Sh13 billion in the current financial as government contract new service providers.

About three months ago ministry of Transport and Infrastructure announced plans to have all civil servants traveling abroad to use the national carrier, Kenya Airways.

Cabinet secretary Michael Kamau said government will procure the services of ten travel agents to ensure government officers exclusively travel on KQ.

Local travel agents under the umbrella of Kenya Association of Travel Agents (KATA) have written to the Public Procurement Oversight Authority demanding intensive investigations into the tendering process in accordance with the Public Procurement and Disposal Act 2005.

Amid the protest ministry of Transport and Infrastructure advertised for procurement of new travel agents Last month.

In a tender notice published in local dailies Government seeks prequalification of travel agents for provision of air tickets in Nairobi, Kisumu, and Eldoret, Malindi, and Mombasa from Kenya airways for the financial year 2013/2014 by the Ministry of transport and infrastructure on November 15, 2013

KATA chief executive officer Jackline Kimeto warned that the Government intention if allowed to proceed will cause substantial damage to the travel industry.  

She complained that her association has tried to meet the Cabinet Secretary for Transport and Infrastructure without success. “In the meanwhile, we request that the tender process be halted until our concerns are addressed,” said Kimetto. 

Kimetto said the being implemented process contravenes the current procedure where individual ministries and parastatals operate their own procurement units and budgets annually.

“We were not aware that the ministry of transport and infrastructure has been appointed a procurement agent for travel services for all government offices in accordance with Section 28 of the Public Procurement and Disposal Act of 2005,” said Kimetto.

 She added, “We consider the Tender Notice issued by the Ministry of Transport and Infrastructure as a parallel procurement process that if successfully, is likely to cause great harm and injustice to travel agents who have already been awarded government tenders from respective government agencies.”

Collectively, all the local travel agents account for over 80 percent of total airline sales countrywide accounting to Sh38.4 billion (US$446.9 million) annually. 

About 35 percent of the 80 percent is business travel agents handles on behalf of government ministries and agencies.  

In the current financial year Kimetto claimed that travel agents have so far participated in Government procurement for the acquisition of travel agents services for the year commencing July 1, 2013.

Already the government owes travel agents more than Sh200 million a situation which has complicated their operation in the global industry. 

Government she claimed is a high risk client due to the protracted payment process thus subjecting travel agents to a lot of financial woes as their invoices take long time before they are settled.

But contacted Nduva Muli principal secretary in charge of transport denied that Government intention is to cancel already issued tenders.  

However, he confirmed that government intention is to create a pool of travel agents which ministries and other agencies can be procuring to provide the travel services.

”We intend to save 20 percent of the total cost of travel business government gives out. Government will allow the already issued tenders to remain in force and only implement the new initiative as from February next year,” said Muli. 

He said Government idea is to centralize acquisition of travel services with the view minimizing cost as well as negotiating well with various airlines.

 “The main objective of this strategy is to register for supply and delivery of Kenya Airways tickets for Public Servants in all government entities,” he added.