Chinese firms lock horns in Kenyan big-money projects

President Uhuru Kenyatta (pointing), Deputy President William Ruto (2nd right) and Coast leaders at the launch of the standard gauge railway line at Changamwe on November 28 last year. FILE 

By Victor Juma

In Summary

• Vicious dog fights for multi-billion shilling contracts leave Beijing and Nairobi with a public relations crisis.
• It was hoped that Chinese domination of Kenya’s infrastructure landscape would produce an easy ride for bureaucrats handling the mega deals but that has not happened.
• Instead, vicious tendering wars have erupted among the Asian firms that are now threatening to implode.

 

Kenya’s big-ticket infrastructure spending has sparked a bidding war among Chinese contractors that is slowing down execution of key projects in East Africa’s largest economy and soiling the hands of senior public officials.

The race for multi-billion-shilling contracts in the  water, railway, road, ports and real estate sectors has in recent months produced some of Kenya’s most vicious corporate battles that have shaken key government departments to the core.  

The tendering wars have been so intense that not even the fact that most of the Chinese companies are government-owned has helped.


It was hoped that Chinese domination of Kenya’s infrastructure landscape would produce an easy ride for bureaucrats handling the mega deals but that has not happened. Instead, vicious tendering wars have erupted among the Asian firms that are now threatening to implode.

The rivalry among Chinese firms has exposed the soft under belly of the Asian giant’s State-controlled capitalism that has left Beijing featuring prominently in a number of controversial big-ticket contracts in Kenya.

The list of contested projects includes the planned construction of the Sh447 billion standard gauge railway line between Mombasa and Nairobi, whose pricing critics say has been inflated by more than Sh100 billion.

China Roads and Bridges Corporation (CRBC) beat a field of competing Chinese rivals such as China Railways Construction Company whose proxies are believed to be behind the controversy surrounding the deal.

READ: State defends award of rail deal to Chinese firm

China’s Exim Bank — the force behind Beijing’s global expansion — has agreed to finance nearly half the project cost, offering an attractive window for a cash-strapped Kenya government.

The fact that CRBC did the feasibility study, designed the railway, determined its cost all by itself has handed critics the most lethal ammunition in the matter that is now subject to parliamentary investigation.

Opponents of the railway project have also accused the government of failing to properly assess the integrity of the Chinese contractor.

It has emerged that the World Bank has recently barred CRBC from participating in any works it is financing because of fraudulent activities in a road project in the Philippines.

CRBC, together with its designated successor China Communications Construction Company (CCCC) Limited, is barred from participating in World Bank-funded projects worldwide starting January 2009 until January 2017. 

No World Bank funds from the National Roads Improvement and Management Project in the Philippines were disbursed to CRBC and five other contractors.

China has since amended its criminal law to make it an offence for Chinese companies and nationals to bribe foreign government officials.

The law applies to companies organised under Chinese law and includes Chinese companies operating overseas as well as foreign-owned enterprises based in China.