How pre-import vehicle inspection reforms birthed monopoly, unending court battles

Few outside the inspection industry took notice when the Japanese-based Quality Inspection Services Japan (QISJ) was appointed in March this year as one of nine firms accredited by the Kenya Bureau of Standards (Kebs) to provide Pre-Export Verification of Conformity (PVoC) services for general goods entering Kenya.

To many, it was simply another procurement decision. But within the inspection industry, it could be the start of a major shift.

For the past decade, QISJ has operated as Kenya’s sole contracted provider for the inspection of imported used motor vehicles, mobile equipment, and used spare parts.

Its expansion into general goods has revived a long-running debate over why Kenya's motor vehicle inspection  market has repeatedly gravitated towards a single dominant provider despite years of procurement reforms aimed at broadening competition.

The contrast between the two procurement outcomes has not gone unnoticed.

While the standards body appointed nine distinct firms to handle general goods following the expiration of previous contracts on February 8, 2026, it continues to rely on just one contractor—QISJ—for the entire automotive import sector.

Rival inspection firms are unsettled by QISJ’s entry into the general goods category, fearing the company could gradually edge out other contractors and eventually emerge as the dominant—if not sole—provider, mirroring its position in the motor vehicle inspection market.

Whether that fear is justified remains contested.

QISJ says it has repeatedly won Kebs contracts through competitive procurement processes and by meeting the technical and financial requirements set by the standards agency. Critics, however, argue that its repeated emergence as the single provider points to a procurement system that has struggled to deliver sustained competition despite repeated interventions by Parliament, the Auditor-General and the courts

“Over the last 10 years, only one company has been exclusively awarded the tender to the exclusion of others,” said an industry source.

“This could be the only tender in Kenya where the public is subjected to this kind of monopoly. Not even national security tenders related to arms, ammunition or ICT infrastructure have such an existing monopoly.”

An economist explained to Weekend Business that "overall, markets characterised by more competition and intense rivalry for customers tend to deliver better market outcomes. These outcomes include lower prices and better service for consumers... introduction of competition – or indeed even the prospect of increased competition – can have a significant and immediate impact on prices”.

QISJ has dominated Kenya's pre-import motor vehicle inspection market for most of the past decade, a position that Parliament and competitors have repeatedly described as a monopoly.

The firm was first contracted to inspect used vehicles and vehicle spare parts coming to Kenya in the 2012–2015 cycle, which was alongside two other firms – Japan Export Vehicle Inspection Centre (Jevic) and Auto Terminal Japan (ATJ).

Jevic had been the sole service provider in the earlier cycle. QISJ would take over as the sole provider after 2015. For the last decade, it was only over the 2022—2025 cycle that another firm was appointed along with QISJ.

Kenya has since returned to the sole provider model with QISJ appointed last year as the only firm during the 2025–2028 cycle. QISJ rejected the monopoly label and instead noted that its investments in testing infrastructure had over the years put it ahead of competition.

“We reject the characterisation that winning a competitive, lawfully conducted tender amounts to a ‘monopoly’. Being selected as a sole service provider following a fair competitive process is not unique to Kenya or to QISJ — for instance, single providers similarly hold sole mandates for equivalent inspection services in other jurisdictions, including EAA Company Ltd in Tanzania and Auto Terminal in Jamaica,” said Managing Director of QISJ Kiyoaki Hatano in an emailed response to queries by  Weekend Business.

“The relevant  question is not whether one company wins, but whether bidders meet the threshold requirements set out in the tender.” While opposing being labelled as a monopoly, QISJ also defended the single services provider model, noting that a single but also an accountable provider reduces risk rather than creating it.

“Where multiple inspection companies operate in parallel, exporters have an incentive to route their vehicles to whichever company applies the least strict standards, undermining the very purpose of the inspection regime,” said Hatano.

“A sole provider removes that incentive entirely, ensures consistent application of standards across all exporters, and gives the procuring entity (Kebs in this case) one clearly accountable point of oversight rather than fragmented responsibility across providers with potentially varying standards.”

Kebs has previously admitted to Parliament's Public Investments Committee (PIC) that relying on a single provider exposes the country to severe risk in the event of a contractual dispute or performance failure. Yet, its attempts to onboard rivals have repeatedly collapsed over integrity issues.

In 2022, it made an attempt to dismantle QISJ's long-standing dominance of Kenya's pre-import motor vehicle inspection market by redesigning the procurement model into a multi-award framework.

The exercise resulted in China's World Standardisation Certification and Testing Group being appointed alongside QISJ, marking the first time in years that the vehicle inspection market had more than one contracted provider.

However, these changes were short-lived as Kebs later excluded the Chinese firm from the 2025–2028 procurement cycle, citing alleged breaches of contract and failure to meet required safety standards for automotive components imported into Kenya.

Other prospective competitors also failed to make it through the procurement process. Japanese firms EAA Company Ltd and Auto Terminal Japan (ATJ) were disqualified after Kebs questioned the authenticity of documents submitted to demonstrate their international inspection infrastructure and operational capacity.

The disqualifications ultimately left QISJ as the sole contracted provider for the 2025–2028 inspection of used motor vehicles, mobile equipment and used spare parts, effectively returning the market to a single-provider model despite earlier efforts to foster competition.

Kebs had made a similar move in 2019, when it advertised a tender for the enlargement of the provision of PVOC services to bring in additional providers.

The standards body would later explain to Members of the National Assembly’s Public Investment Committee “that the rationale for expanding the contract was to mitigate against the risk of relying on one service provider and the imminent exposure in case of dispute or lack of performance by the existing service provider”.

The tender process, which had run its course to the point of selection of two additional firms, however stalled after Kebs was directed to await conclusion of debate by the National Assembly on a special audit that had adversely mentioned the two selected firms (ATJ and AEE Company), including allegations of forged documents to demonstrate their capability to inspect vehicles overseas.

The parliamentary inquiry went cold at the Trade Committee.

OISJ was unilaterally awarded without any procurement process, or OISJ intervened in the National Assembly; no report has been made public.

Last year’s return to a single-provider model was the culmination of a procurement process that attracted intense competition. The 2025–2028 tender attracted a crowded field of international bidders, but many fell by the wayside.

In January 2025, Kebs invited bids for the 2025–2028 contracts, attracting 19 international inspection firms. Nine were eliminated at the preliminary evaluation stage after being found non-responsive, substantially reducing the field before the technical and financial evaluations began.

Among the firms disqualified were EAA Company Ltd and Auto Terminal Japan (ATJ), which are historically QISJ's largest Japanese competitors, for failing the integrity test. This was after due diligence showed that documents submitted to demonstrate their testing infrastructure and operational capacity were not authentic.

Those findings were earlier referenced in a Special Audit by the Auditor-General, which found both firms had falsified their testing infrastructure and capacity documentation during past tender processes, effectively locking them out.

Following the award of the tender to QISJ, there was a wave of legal challenges that drew not only Kebs but also QISJ into a series of courtroom battles.

While Kebs was the primary respondent in most of the procurement disputes, QISJ increasingly became a participant in the litigation as rival firms sought to overturn tender awards in which it had emerged as a successful bidder.

Records in court and at the  Public Procurement Administrative Review Board (PPARB) show that QISJ has repeatedly joined legal challenges to Kebs procurement decisions as an interested party, participating alongside the standards body in defending tender awards challenged by rival inspection firms.

A lawyer explained that under Kenyan law, an interested party is permitted to join proceedings where the outcome may directly affect its legal or commercial interests.

However, observers say the frequency with which QISJ has intervened in procurement disputes illustrates the lengths to which the company has gone to defend its position in Kenya's inspection market.

QISJ said this is not an oddity and that firms that participate in a tender are allowed to join in such cases.

“As a matter of general principle, any company that participated in — or whose contractual position is directly affected by — a tender process has a legitimate interest in proceedings concerning that tender, and is entitled under the law to seek to protect that interest, including by application to be enjoined as an Interested Party,” said Hatano.

“As the successful bidder, QISJ is a statutory party to any review of the tender it was awarded — this is not a discretionary or self-initiated legal strategy, but a requirement built into the review process itself, applicable to any successful bidder in similar proceedings.”

Among the recent cases involved Precision Experts Ltd, which challenged the 2025–2028 PVoC tender before the PPARB, arguing that Kebs had unfairly locked out Kenyan firms by imposing financial and compliance requirements that favoured large international inspection companies.

Although the application named only Kebs and its managing director as respondents, QISJ successfully applied to join the proceedings as an interested party, arguing that the outcome would directly affect its commercial interests. Together with Kebs, the company successfully defended the procurement before the PPARB, the High Court and later the Court of Appeal, clearing the way for the tender process to proceed.

After Kebs awarded the contract for the 2025-2028 motor vehicle inspection cycle, rival inspection firms including TUV Austria Turk, TIC Quality Control and Bay Area Compliance Laboratories Corp (BACL) filed fresh challenges before the PPARB and the High Court, alleging that Kebs had notified successful bidders before completing mandatory professional evaluations.

In a separate case, Togo Motors Ltd challenged a Kebs directive requiring importers of uninspected vehicles to pay an additional Sh12,000 document validation fee to QISJ. Court records show the company again joined the proceedings as an interested party, arguing that the outcome directly affected its contractual rights.

As players fear being dislodged from Kenya's import pipelines, its operational track record has come under scrutiny both at home and across the border.

Between 2022 and 2023, QISJ faced accusations in Kenya for allegedly issuing clearance certificates to vehicles without disclosing that they were accident cars—a lapse authorities warned posed a direct safety threat to road users.

More recently, the company hit a wall in Tanzania. In a letter dated November 6, 2025, the Tanzania Bureau of Standards (TBS) rejected QISJ's application to enter its framework agreement.

The Tanzanian regulators cited twin issues of operational and financial red flags.

“Your application for entry into the framework agreement was not considered for award due to post-qualification reports revealing to have no mandatory equipment such as an airbag scan tool, battery tester and alternator tester at QISJ Yokohama Dikokufuto and QISJ Nagoya Inspection Site-77 Shihonagicho Inspection Centres,” the Tanzania Bureau of Standards wrote in a regret letter to QISJ following a tender process.

“Also, the financial statements for the year 2022/2023 were unreliable such that the resulting statement for 2022/2023 had two different figures on different reports, which resulted in two different results and a discrepancy in total assets, current liabilities and current assets for the two financial statements presented for the same year 2022/2023.”