Inside raging battle for the control of key eCitizen system

Soon after assuming office in 2013, President Uhuru Kenyatta began the push for a digital payment system for government services.

His team was quick to deliver with the eCitizen platform, which has now threatened to leave thousands of service seekers in limbo.

The rush saw a project launched and operated so quickly that several legal procedures were set aside.

Regularisation of the project, which has been in operation since December 2014, has threatened to crumble everything.

The National Transport and Safety Authority (NTSA), Immigration Department, Ministry of Lands, Directorate of Criminal Investigations, Attorney General’s office and several others have restricted a number of their services to the portal.

STANDOFF

Without a backup, thousands of Kenyans and foreigners, companies and the government itself would be left in a difficult position, should an ongoing standoff escalate and lead to its death.

The system has since inception been operated and maintained by Webmasters Kenya and its proprietor James Ayugi, with only a handful other people aware of how to keep the system running.

Trouble has already started brewing with several service seekers’ calls for help on eCitizen’s Facebook and Twitter pages going unanswered.

“I applied to have a company linked online at the beginning of June and nothing has been done to date. I got someone who works there through a friend and he (the employee) is now asking for Sh3,000 to help me,” said Ms Betty Njeri-Anthony, one of the complainants on eCitizen’s Facebook page, when contacted.

CALLS UNANSWERED

Another user, Ms Vilma Kiarie, said the customer service number given has been going unanswered leaving her unable to reverse a wrong payment.

The World Bank, which funded eCitizen’s pilot phase, washed its hands off the project in August last year after confirming that the portal was implemented as per contracts signed in June 2014.

A court battle between the eCitizen developer, a company that has been collecting funds through the system, and the Treasury has not only revealed several holes in the project implementation, but has also complicated matters.

TREASURY SUED

Goldrock Capital, which has been collecting money and remitting to government from the platform, has sued the Treasury for locking it out of the mobile money collection portal.

Goldrock has made party to its suit Webmasters Kenya which developed the portal and which contracted it to do the collections.

As soon as the Treasury finally wrested control of the digital payments system, it began regularisation of the entire project but the process has sparked a three-way standoff.

“After a lot of back and forth, the President’s chief of staff placed the secretariat under the Treasury. It was not clear from the onset how we were going to regularise this. We can either go back and say 'you did wrong' and crucify everyone involved or regularise this project that is still on pilot,” said Mr Ayugi, the developer.

NO COMMENT

Contacted Tuesday, Dr Thugge said the Treasury cannot comment on our queries because there is a matter in court on eCitizen.

But he said the ICT ministry is in the process of training staff to provide technical support for the platform. "The government digital payments secretariat provides technical and customer support to eCitizen users. The Ministry of ICT is in the process of further rolling out the system to more government services," he said.

The President formed a task force to find a digital payments solution in April 2014, appointing Treasury’s then director of economic affairs Justus Nyamunga to lead the team. One month down the line, the team asked financial service providers to present their ideas.

Mr Ayugi’s concept was taken up. He is one of the World Bank’s shortlisted contractors.

EMPTY WALLET

The team was comfortable with Mr Ayugi. The only catch was that the team was operating on an empty wallet as it had not been budgeted for. “They said they had a July 2014 deadline for a concept,” Mr Ayugi said in an interview. “My system was already plugged in with Pesa Pal, a payment service provider. The team didn’t have money or a budget but wanted a product because they were under pressure.”

Dr Thugge then wrote to the World Bank’s lending arm, the International Finance Corporation (IFC) on May 29, 2014 seeking funding for the system.

As setting up a whole new project would take time and a lot of money, it was agreed that the system would come in as an expansion of the e-registry.

IFC in its response said it could only fund the pilot project but only on four conditions — that at least 10 government agencies would be included in the pilot, Mr Ayugi’s Webmasters Kenya would host the system, the government would fund the subsequent phases and finally it would go on record that the project did not require going through the usual public procurement process.

With everyone in agreement, IFC funded the pilot and Webmasters came up with eCitizen.

TECHNICAL SUPPORT

The contract between IFC and Webmasters Kenya that has been filed in court indicates that the developer was to provide technical support for eCitizen until January, 2015 — six months after going live.

Deputy President William Ruto was the first person to renew a driver’s licence through eCitizen, Mr Ayugi said. Mr Ruto threw his weight behind eCitizen.

Things went smoothly until Pesa Pal, which was handling the payment system, opted out arguing it was spending most of its technical support budget on sorting out eCitizen issues. “We started with Pesa Pal which charged a fee of 3.5 per cent of the transaction. We were utilising most of their support resources.”

“Another problem with both Pesa Pal and Jambo Pay, which we also briefly engaged, was that we could not have a single dashboard for different services. For you to enable 200 services, you would need 200 accounts and that would be difficult to maintain. There was a meeting with all mobile network operators at Kempinski and it was suggested that we get a single paybill number,” Mr Ayugi said.

The software developer then negotiated a deal with Goldrock Capital.

PAYBILL NUMBER

Goldrock registered a paybill number, 206206, with Safaricom for M-Pesa payments alongside a short code 22206 across all mobile networks.

Webmasters also hired 50 individuals to handle technical support and customer care.

At this point the project was still under the Office of the President. On May 13, 2015 President Kenyatta expanded his task force’s authority to include day-to-day implementation and management of the system.

On November 10, Safaricom wrote to the President chief of staff, Mr Joseph Kinyua, seeking confirmation of administrators of the paybill number as the May, 2015 gazette notice only gave authority to the task force.

Mr Kinyua would respond 19 days later, confirming that Goldrock was to be an administrator.

Read the letter from Mr Kinyua’s office: “The bank details and the premium service provider records as provided to you by Webmasters Kenya, pursuant to their mandate remains unchanged during this transitional period."

Shortly after, the Treasury wrested control of the project from Mr Kinyua’s office.

LOCK OUT GOLDROCK

Dr Thugge on April 28, 2017 wrote to Safaricom instructing it to lock Goldrock out of the M-Pesa paybill number, sparking the court battle.

In response to Goldrock’s claim that the Treasury unfairly locked it out of the M-Pesa account, the PS said the ministry has never gazetted any private firm to collect eCitizen payments on behalf of government.

The suit is yet to be determined, but Goldrock has laid claim to Sh127 million collected between 2015 and 2017.

Mr Ayugi has since dismissed the support crew he hired for the system, which has stalled a number of issue resolutions raised by service seekers.

The developer said he has never been paid by the government for works done after the World Bank’s funding ended in January, but that he is hopeful.