Row heightens over Sh1.2 trillion rail project

Wednesday, November 27th 2013

By Moses Michira Kenya:

President Uhuru Kenyatta will Thursday commission the construction of the Mombasa-Nairobi railway line, as a row escalates over procurement issues that could derail the project. A parliamentary committee last week grilled Transport Cabinet Secretary Michael Kamau on the procurement procedure used to pick China Bridges and Roads Construction as the contractor for the Sh220 billion project. The committee on Transport, Public Works and Housing had expressed reservations about the way Kenya Railways Corporation (KRC) issued the tender but its report is yet to be tabled in Parliament. While Kamau defended the deal saying that the Chinese government had seconded the contractor because it was funding most part of the project, Attorney General Githu Muigai had earlier trashed that argument.

Prof Muigai said KRC should have sought a contractor for the project competitively to promote fair competition, transparency and accountability. The AG’s opinion had been sought by the Public Procurement Oversight Authority (PPOA). In his letter dated April 30, Muigai warned that the tender had been awarded unlawfully to the Chinese contractor, presenting the newest possible hurdle that could set the project up for delays or even cancellation. “It is my opinion that a so-called government-to-government agreement is not a method for selecting suppliers,” said Muigai, who is the chief legal advisor to the Government. It is expected that the AG’s opinion could shape the decision of the parliamentary committee, which was asked to determine issues relating to how the tender was awarded, and if the winning contractor had the capacity to execute the project. Nyali MP Awiti Bollo earlier this month also demanded answers on what action the State would take should KRC be found to have erred in awarding the tender. Among the arguments raised was that the Kenya Government was funding part of the project using public resources, which would then demand that a competitive process be pursued in determining the winning contractor. Earlier, KRC had flip-flopped over the question whether the project had been tendered or the agreement was entered between Kenya and China at intergovernmental level.

Nduva Muli, the Transport principal secretary and previous KRC managing director, had submitted to the public procurement watchdog that the tender had been floated ‘in error’ before it was withdrawn. “The procurement is a G to G contract, which is to be funded by negotiated grant/loan and is, therefore, exempt from the application of the PPD Act 2005,” read part of Mr Muli’s letter to the PPOA. KRC had been asked to explain why it cancelled the tender for the Mombasa-Nairobi standard gauge railway project. Muli submitted that a memorandum of understanding and co-operation had been entered into between the Transport ministry through the then minister Ali Mwakwere and the contractor in 2009 for design and construction of the railway project. The Mombasa-Nairobi track is the first phase of a 1,250-km project that would eventually end in Kampala. The next phase will involve developing the Nairobi-Malaba railway line after completion of the first phase. The entire project worth Sh1.2 trillion is expected to take five years to complete, with a six-month allowance to cover any unforeseen challenges.