Kenyan bank notes will get a new coat of varnish to reduce wear and tear and prolong their life in circulation. British printer De La Rue, which mints Kenyan currency at its factory in Ruaraka, Nairobi, said it was adding the fresh coat which will see paper money stay longer before getting defaced.

The more durable paper money is expected to slash printing costs and ultimately reduce cash cost. Notes have been defaced or damaged due to poor handling, which prompted the Central Bank of Kenya to issue regulations that provide a jail term of up to three years or a fine of Sh500,000 to those who mishandle notes and coins.

“A new varnishing line which makes finished bank notes more durable has been added to the Kenya factory, providing more operational flexibility in line with other sites,” De La Rue said in its latest release.

The British firm in January said it was pumping Sh286 million in the expansion of its Ruaraka facility. It comes even as the country’s planned switch to new generation bank notes in compliance with the 2010 Constitution has delayed following court fights over the Sh10 billion-a-year tender.

Early this year, the Public Procurement Administrative Review Board (PPARB) terminated the De La Rue contract for new look cash, saying that the CBK had awarded it unlawfully. The award of the contract to De La Rue came after the government took a 40 percent stake in the local subsidiary of the currency printer.

Swedish firm Crane AB, also bidding for the Sh10 billion-a-year currency printing tender, moved to court and accused the central bank of collusion after losing. De La Rue has had a stranglehold on Kenya’s lucrative money printing business except for the period between 1966 and 1985 when another UK firm, Bradbury Wilkinson, did the job.

De La Rue acquired Bradbury Wilkinson to become the dominant feature in the currency printing market. The High Court in April nullified the bidding process that awarded De La Rue the mega contract late last year on the basis of a 15 per cent preferential treatment score.

The High Court stated that the tender process was fraught with irregularities. De La Rue had late last year beat three other European banknote printing firms, German firm Giesecke & Devrient, Swedish firm Crane Currency and Oberthur Fiduciaire of France to the hotly contested and lucrative contract.

The printing tender has been seen as an acid test for the banking regulator, which has never successfully floated a competitive international currency printing bid since it was established in 1966.