JKIA duty free firm kicked out of Mauritius

A Swiss firm which bagged a lucrative tender to exclusively build and operate duty free shops at the Jomo Kenyatta International Airport has been kicked out of Mauritius following allegations of bribery in sealing a similar deal in the island nation.

Dufry International’s RS1 billion (Sh7.1 billion) per year contract with Mauritius Duty Free Paradise (MDFP) has been cancelled following investigations into terms of the tender.

The firm is facing pressure in Kenya as concern has been raised on how it bagged the JKIA, Nairobi, deal. Authorities in Mauritius believe that the Swiss firm’s contract may have been irregularly altered to favour it by a Mauritian official, Simo Carevic, who doubles up as chief executive of MDFP and Dufry’s representative in Mauritius.

MDFP contracted Dufry in 2012 as an exclusive supplier of the country’s duty free shops, but cancelled the deal in August this year after Mauritius police and other government authorities started investigating the contract.

The revelation has been made in a suit filed by a lobby, Consumer Federation of Kenya (Cofek), against Kenya Airports Authority (KAA), the Transport Ministry and Dufry seeking to cancel the firm’s contract to build and operate duty free shops.

Cofek is challenging exclusivity clauses in Dufry’s contract with KAA, insisting that they lock out local firms from the highly lucrative concession industry.

The lobby is also challenging KAA’s decision to go ahead with the contract despite calls for investigations into possible graft in awarding Dufry the deal.

“The concession agreement is biased and prejudicial as it locks out local firms, KAA’s own interests and those of the larger tax payers who support the existence of KAA. The arrangement complicates the realisation of optimal tax revenue.

“Even after a forewarning by the Transport ministry, KAA proceeded to retain Dufry’s exclusivity. Cofek has legitimate fears that Dufry could as well be used to pay out commissions and other illegal activities to some cartels behind the clandestine issuance of the concession agreement,” Cofek says.

In October last year the Swiss firm won another legal battle against Dubai-based concessionaire Suzan General, which came second in the JKIA tender proceedings. Justice George Odunga ruled that the Swiss firm had legitimately won the tender.

The new suit comes barely two weeks after the High Court dismissed another case filed by World Duty Free, a firm associated with businessman Kamlesh Pattni, which was also seeking to stop the concession deal.

World Duty Free claimed in the suit that it had already been awarded the deal.

Its claim was founded on a deal with the government initially signed in April 1989 and later amended in May 1990.

SOURCE: BUSINESS DAILY