How three tech firms struck jackpot in e-Citizen deal

A consortium of three technology companies running the controversial eCitizen platform was given sweeping powers and an opportunity to mint billions from taxpayers seeking government services, according to a secret contract signed as soon as President William Ruto took power.   

The contract signed on May 25, 2023, between ICT Authority on hand and Webmasters, Pesaflow and Olive Tree Media, stipulated that the consortium was to be paid off payment of Sh50 million, and an annual fee of about Sh1 billion when the government onboarded over 8000 services. Currently, there are over 22,000 services that are being accessed on the platform. 

Further, the consortium was to rely on the skills of technical personnel who were to be paid between Sh27,000 and 53,000 per day to keep the system working. The contract provided that ICT Authority was not to use the infrastructure without a separate agreement and that the consortium had the final authority to reconcile how much money was handled  by the system.  

The contract finally lifts the veil of what has been a layered and secretive deal of how the money generated from provision of government services is handled. Yesterday, the MPs quest to determine how much money has been generated by the system since it was created in 2013 was unsuccessful as the eCitizen consortium did not have sufficient information. 

The contract has revealed the massive millions of shillings that the ICT Authority is expected to pay the private companies behind e-citizen for various services provided.

Although whenever a person seeks a government service online, they are charged a Sh50 convenience fee,  the contract provides a fee of between Sh10 and Sh20, depending on the volume of transactions. The cost per transaction for monthly transactions for volumes of between 1 to 2 million is Sh20, compared to what Kenyans currently pay for each, amounting to Sh50.

The government was charged Sh 50 million for standardization of the platform using the open architecture, and subsequently followed up with a ‘payment gateway tariff’ of between Sh10 and SH20 per transaction.

For monthly transaction volume of between 2 million and 3.5 million, the contract points to payment of Sh17 each, for those between 3.5 million and 5 million, the contract provides a payment of Sh14 each and above 5 million, each was set at Sh10.

By the time the contract was signed in 2023, the government was to pay an additional annual maintenance fee of  Sh300 million, for 751 – 1500 services. This figure was to rise to   Sh400 million another Sh576 million  for between 1,501 and 2500 services,

The rates were set at  Sh819.2 million for 2501 – 4500 transactions, then Sh983 million for 4501 – 6500 services. Since the services on eCitizen, where over 22,000 public services have so far been integrated on the government’s e-platform, it is now supposed to pay at least Sh1billion, as it has crossed attained the  6501 - 8500  band of services.

The consortium separately charges custom services amounting to Sh52,000 for s senior project manager while a software tester, researcher and system analyst is paid at least Sh27,000 daily. This means that a senior project manager working for eCitizen for 30 days takes home about sh 1.5 million and about Sh800 for a researcher

“The contract price is inclusive of and subject to services discovery and analysis, support and maintenance which will be assumed to commence six months after onboarding services (warranty period) except for the initial 397services that existed as at the date of hand over of the e-citizen platform by the supplier to the government that are amenable to immediate support, maintenance payment on graduated scale based on volume of transactions where relevant,” states the contract.

Immigration Principal Secretary, Belio Kipsang, yesterday told the National Assembly committee on Administration and internal security that the current contract is in place for a period of three years, with effect from May 25, 2023 even though e-citizen started in the 2014/15 Financial Year.

Amid questions on risks the system could be exposed to, including alterations which could see massive public funds not well declared, the PS insisted that a dynamic register is maintained and updated periodically to reflect emerging threats.

“The e-citizen system is continuously monitored via our security operation centre at Nyayo House, providing real-time monitoring, intrusion detection, data integrity verification and regular penetration testing,” Kipsang said.

The PS also said that the e-citizen ecosystem is supported by a consortium of developers registered as Electronic Service Solutions (ECS) LLP, which is obligated to provide any and all services in the contract, receipt of all payments accruing therefrom and issuance of any and all performance or any other security that may be required.

The consortium comprises Webmasters Kenya Limited, Pesa Flow Limited and Olive Tree Media Ltd.

This came as members of the committee pointed to shifting goal posts of the eCitizen control and the framework contracting agreement, signed between ICT Authority and M/S Webmaster Kenya Limited in consortium with Pesa Flow limited and Olive Tree Media limited.

Similarly, the committee led by Narok West MP, Gabriel Tongoyo, was concerned about persons who have signed off the contract hand written, saying that critical persons like the Attorney General or Principal Secretary, who is the accounting officer, are not included in the contract of such a magnitude.

“This is a matter of concern to the people and it is about money. We want to get information on this particular issue and somebody must take charge and respond accordingly. We oversight on behalf of Kenyans and when we request the State department for Immigration and Citizen Services to appear, we are requesting on behalf of Kenyans,” said the committee Vice Chairperson, Dido Ali Raso.

According to the contract, Webmasters Kenya limited is the lead institution and administrative managing partner responsible for the consortium and support maintenance services, including provision of customer care and related services of the consortium project.

The contract highlights the Webmasters Kenya Limited responsibilities to include procuring the seat and office of the consortium, providing support and maintenance services, onboarding services in the consortium project and providing system standardization services of the project.

It is also tasked with employing and maintaining all staff and team responsible for the support and maintenance of all systems and programmes including training, maintenance and support to end-users of the products under the project.

They were also to procure the necessary licenses in accordance with the laws of Kenya required for the implementation of the consortium project as well as meet and cater for all costs relating to the bid – where applicable – and contractual arrangements resulting from the consortium project and the operational expenses incurred or to be incurred by consortium members.

On the other hand, the contract states that Pesa flow is project managing partner, solely in charge of and responsible for all matters relating to payments under the project in accordance with the National Payment System Act, 2011 including but not limited to the electronic payments set up, integration and implementation and the technical aspects of the consortium project work.

It is also to secure transactions to ensure all payments are processed securely and in compliance with industry regulations, seamless settlements to ensure automated settlements directly to MCDA’s bank accounts, eliminating the need for manual reconciliation and simplifying the payment process.

The PS  told the committee that a comprehensive change request process is in place for all system updates, which includes risk assessments, security impact analyses and extensive testing before deployment.

“A phased and adaptive rollout mechanism is used for onboarding new government services, mitigating risks during integration while supporting system growth,” said Kipsang.

He also said that the department conduct Data Protection Impact Assessments (DPIAs) in conjunction with the Office of the Data Protection Commissioner to identify privacy risks and ensure data processing practices meet the highest protection of standards.

“With regards to support for growth and onboarding of new Government services, the e-citizen system is designed to scale, enabling seamless onboarding of new government services without compromising on security,” he noted.

The MPs did not field questions to the PS and other officials accompanying him, even as they accused the team of failing to respond to issues they have been raising and rescheduled the session.