NTSA Announces Review of New Driving License Deal Following Backlash

The National Transport and Safety Authority (NTSA) has pledged to reassess its controversial 21-year smart driving licence production agreement following mounting pressure and sharp criticism from Members of Parliament.

The commitment was made on Thursday, April 9, when NTSA Director General Nashon Kondiwa appeared before the National Assembly’s Public Debt and Privatisation Committee.

During the session, Kondiwa acknowledged the growing unease surrounding the deal and assured lawmakers that the authority would revisit its structure in response to the concerns raised.

The agreement in question, signed between NTSA and a private consortium led by PesaPrint, has come under intense scrutiny for what legislators describe as a deeply imbalanced revenue-sharing arrangement.

According to details presented to the committee, the current framework allocates approximately 77 per cent of the projected revenues to private partners, leaving the government with less than 25 per cent over the life of the contract.

This arrangement sparked outrage among committee members, who questioned both the fairness and transparency of the deal. Committee Chairperson Abdi Shurie led the charge, arguing that the agreement disproportionately benefits private investors at the expense of Kenyan taxpayers.

He pointed out that over the 21 years, projected revenues stand at around Ksh900 billion against an estimated cost of Ksh300 billion, figures he said translate into excessive profits for the private entities involved.

Shurie did not mince his words, describing the deal as heavily skewed. He argued that it effectively transfers significant public revenue into private hands, raising serious concerns about whether due diligence was exercised during negotiations.

His sentiments were echoed by several MPs, including Hon. Daudi, who questioned the rationale behind committing such a large share of national revenue to a private consortium for more than two decades.

In response, Kondiwa defended NTSA’s decision to adopt a Public-Private Partnership (PPP) model, citing longstanding financial constraints faced by the authority.

He explained that limited budgetary allocations from the National Treasury had significantly hampered NTSA’s ability to independently finance and scale the production of smart driving licences.

Kondiwa further revealed that under the previous fully government-funded system, NTSA struggled to meet public demand. Over a span of nearly ten years, the authority managed to produce only 2.7 million licences, well below its target of five million.

This shortfall, he said, necessitated exploring alternative financing models, including partnerships with private sector players.

However, he admitted that NTSA may not have been in a strong bargaining position during the negotiations. According to Kondiwa, the authority was effectively negotiating services rather than controlling the financial resources, placing it at a disadvantage.

This limitation, he suggested, may have contributed to the terms that lawmakers now find contentious. The consortium involved in the deal reportedly includes a major local bank, which entered the arrangement after acquiring one of the country’s oldest financial institutions.

This revelation further fueled MPs’ concerns, with some questioning why a critical national function, comparable to the production of identification documents, had been outsourced to private entities instead of being retained within government control.

Amid the growing backlash, Kondiwa conceded that the agreement’s structure might require significant adjustments. He assured the committee that NTSA would undertake a comprehensive review of the deal, including re-engaging key stakeholders to ensure that any revised framework better reflects public interest.

He emphasized that the authority is committed to transparency and accountability, and that it would consider all necessary changes to address the issues raised by Parliament.

The review process, he added, would aim to strike a more equitable balance between public benefit and private sector participation, while still ensuring efficient service delivery.

The unfolding debate highlights broader concerns about the use of Public-Private Partnerships in critical government services, particularly where long-term revenue implications are involved.

As scrutiny intensifies, the outcome of NTSA’s promised review is likely to have far-reaching implications for how similar projects are structured in the future.

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