Railway deal exempt from procurement law, court told

onWorkers finalise the construction of a sample new standard railway line at the Changamwe Railway Station. Photo/Kevin Odit 

By GALGALLO FAYO

 

 

The award of the Mombasa-Malaba standard gauge railway contract to a Chinese firm was a government-to-government contract that is not subject to the Public Procurement and Disposal Act, the Transport secretary told the High Court on Thursday.

Responding to a suit filed by the Dock Workers Union challenging award of the Sh1.2 trillion tender to China Road and Bridge Corporation, Michael Kamau said Section 6 of the Act excludes government-to-government contracts from being subject to the law.

The Attorney-General a week ago warned State firms against using government-to-government agreements to bypass requirements of the Public Procurement and Disposal Act 2005. “That Act cannot apply to negotiated grants and loan,” said the State counsel representing Mr Kamau.

In an advisory opinion to concerns raised by Maurice Juma, the head of the Public Procurement Oversight Authority (PPOA) regarding the tender for the construction of the railway, AG Githu Muigai said government-to-government agreements are bilateral deals under the Treaty Making and Ratification Act 2012.

Risk

Justice George Odunga on Thursday allowed the union to file their main application within seven days, saying the petition raises weighty issues. 

READ: Dock workers in court to block Sh1.2trn rail line

The Dock Workers Union claimed the Chinese firm has no expertise and capacity to carry out the multi-billion shilling project launched yesterday President Uhuru Kenyatta.

The union has sued the Cabinet secretary for Transport and managing directors of Kenya Railways Corporation and Kenya Ports Authority. The workers claim the cost of the Sh1.2 trillion project has been inflated and about Sh600 billion of taxpayers’ money is at risk of being lost.

But Mr Kamau in his response sought to dismiss the claim by comparing the cost of Kenya’s project with that being undertaken by Ethiopia.

The minister said Ethiopia’s project, which is of Class II, costs Sh327.6 million per kilometre while Kenya’s Class I railway will cost Sh249.8 million per equal distance.

Hellen Mungania, Kenya Railways Corporation secretary, said the agreement overrides provisions of the Procurement Act. She said that since the China’s Exim Bank is providing the financing, its rules and conditions govern the procurement.