Kenya Bureau of Standards (KEBS) Managing Director Bernard Njiraini has lifted the lid on how Kenyan car importers lost over Ksh2.5 billion through an overcharge documented as an inspection fee.
In a feature aired on Citizen TV on Saturday, May 30, Njiraini announced that the government agency was investigating one of its contractors, Quality Inspection Services Inc Japan (QISJ), over an extra Ksh4,000 extra fee charged on each imported car for over six years.
"Overcharges curb importation because the prospective importer is cut off or dissuaded by expensive fees thus increasing cost of business in Kenya," Njiraini's statement reads in part
KEBS had contracted QISJ as the only entity mandated to conduct inspection and verification of all vehicles imported into the country.
On May 26, a private Kenyan car importer, George Odhiambo filed a case at the High Court, accusing the Japanese company of overcharging Kenyans during the inspection process, arguing that the burden of the extra cost was eventually passed to the consumers.
“The first respondent (Quality Inspection Services Inc. Japan Limited) has been overcharging exporters and importers and Kenyans and unfairly withholding more fees than that contracted for.
“The first respondent charges from its website, and still overcharges consumers when the current exchange rates for each subject country are applied against the contracted currency," court papers filed by Odhiambo’s lawyer Andrew Ombwayo read in part.
The petitioner went on to question the legality of QISJ operating as a monopoly in Kenya, giving them the autonomy he claims they have used to siphon billions over the years.
“The fact that the extra charged levies by the first respondent are passed to the consumers violates the consumers’ right to the protection of their economic interest.
"The loss is likely to be more considering that a Parliamentary progress report of the special audit report dated July 10, 2019, on procurement of pre-export verification of conformity to standard tender no Kebs/T019/2017-2020 had in page 13 placed the figure of motor vehicles imported into Kenya in the years 20150-19 at 409,070 used vehicles,” Odhiambo says in the court papers.
The country imports an estimated 130,000 second-hand vehicles annually, with used cars accounting for about 85% of the imports, where an estimated Ksh60 billion is spent on these units annually.
