Kilifi county government terminates Sh300 million revenue collection permit

Kilifi, Kenya: A court battle is looming between the Kilifi County government and a private company it had hired to collect revenue.

The County Government wants to terminate the multi-million revenue collection contract issued to Rain Drop Limited last year.

The Sh300 million contract was signed on July 4 2014 and was reportedly cancelled early this week.

On February 16 this year the county government wrote to the firm under the reference no CG/KLF/FIN/19/VOL.II/(09) citing the termination of the contract after the company, allegedly, failed to to automate revenue collection in the county as per the agreement.

A letter signed by the County Secretary Owen Baya says the County government laments the company failed to put in place infrastructure like weigh bridges and automated systems for tax collection, parking bays and also did not, allegedly, supply and set up of automated systems for parking fees collections.

"This is to notify you of the termination of the above referenced agreement on the grounds that you have substantially failed to achieve the milestone envisaged in the contract as at the long stop date of 4th January 2015,"the letter reads in part.

On Friday the CEO of Rain Drop Shaib Hamisi Mgandi termed the termination as illegal and against the law.

Mgandi remarked in the said agreement that it was stipulated, in case of a disagreement, there should be a declaration of the dispute and the parties involved referred for arbitration.

He said the agreement required the firm to put in place all the infrastructure within a period of two years and wondered why the contract was cancelled only seven months after its signing adding the company had already spend more than 100 million putting in place the first phase of the infrastructure hence the cancellation would translate into losses.

Mgandi said his company had built five of the required twelve weigh bridges which he confirmed were in operation.

The CEO also noted that Rain Drop had fully automated revenue collection system at the beginning of this month within the county after buying over 200 automated gadget systems for parking fees and cess collection.

"I strongly believe there is a foul play as we have already done much in only six months since we signed the agreement,"he noted.

Mr Mgandi said he has already instructed his lawyer to move to court to contest the termination of the contract.