Contract for standard gauge railway above board, says PS

PHOTO | FILE Acting KAA MD Lucy Mbugua (right) with Transport Principal Secretary Nduva Muli at a past fuction. The Transport Principal Secretary says that nothing is wrong with the rail tender.  NATION

In Summary

• Transport Principal Secretary Nduva Muli told the Nation in an interview that the process through which the China Road and Bridge Corporation got the job was “beyond reproach” as it met the necessary legal and technical requirements. 
• Mr Muli said some people were out to confuse the public by spreading rumours that the government has signed contracts worth Sh1.2 trillion for the project billed as the biggest infrastructure development in Kenya since independence.
• Mr Muli said the questions raised have turned into a witch-hunt, and that the project has been approved by the Attorney General.

By CHARLES WOKABI
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By JOHN NGIRACHU
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Ahead of the start of investigations by the Public Investments Committee of the National Assembly this week, the government has defended the integrity of the contract given to a state-owned Chinese firm to build a standard gauge railway line.

Transport Principal Secretary Nduva Muli told the Nation in an interview that the process through which the China Road and Bridge Corporation got the job was “beyond reproach” as it met the necessary legal and technical requirements.

He said the project is being implemented with the highest level of accountability and there is no chance for mischievous dealings as alleged, mostly by an MP and a Senator.

SPREADING RUMOURS

Mr Muli said some people were out to confuse the public by spreading rumours that the government has signed contracts worth Sh1.2 trillion for the project billed as the biggest infrastructure development in Kenya since independence.

“I am not aware of any contract the government has signed with anyone for SGR works that amounts to Sh1.2 trillion. It is either people are talking about another project or they have a problem with mathematics. We have only signed a contract of Sh327 billion,” Mr Muli said.

He said the only contract the government has entered is for the first phase of the project, which involves building railway infrastructure from Mombasa to Nairobi and buying locomotives and rolling stock.

 

The perception has been that plans for the project are complete, but statements by Mr Muli and Deputy President William Ruto suggest the government is initially keen to see the Mombasa-Nairobi stretch complete.

The Chinese firm is expected to start the actual construction by the end of the month, but the project has been clouded by allegations that were made in the week leading to the inauguration in November last year.

DRAFT AGREEMENT

Mr Muli said the questions raised have turned into a witch-hunt, and that the project has been approved by the Attorney General.

“We find the draft agreement to be in order and you may proceed to finalise the same,” Attorney General Githu Muigai said in a letter seen by the Nation.

The AG also gave his nod to a deal in which China Road and Bridge Corporation will supply facilities, locomotives and rolling stock for the Mombasa-Nairobi railway stretch.

“Based on the above, the commercial contract may be signed on behalf of the government of Kenya as a step in the process of rolling out the project at hand,” Prof Muigai wrote.

On questions raised about CRBC’s capacity to implement the project, the PS said the government assessed the corporation and there is no doubt on its ability.

Mr Muli said the government sent a delegation to China from October 27 to November 5, 2012 to undertake due diligence on China Road and Bridge Corporation, during which details and conditions for funding the project were discussed with the Exim Bank of China.

“From the documents submitted, and the site visits, it was clear that CRBC has the legal standing, financial capacity and preparedness to enter into an EPC contract with Kenya Railways for the construction of the rail and delivery of facilities, locomotives and rolling stock,” Mr Muli said.

The firm lists among its projects over the years the building of part of the 678.4-km Datong-Xi’an railway in China.

The company has in total handled nine railway projects in China, among them a 153.7-km section of the Beijing-Shanghai high-speed railway project.

Working in more than 45 countries, China Road and Bridge Corporation is involved in the construction of roads, bridges, railways, tunnels, airports and ports. It built the Northern and Eastern bypasses in Nairobi and is currently building the Southern bypass.

Questions have also been raised on whether there should have been a competitive tendering for the project.

“Where a grant or loan is given, the country that is giving the grant determines the procurement procedures, just like all the World Bank projects you see in Nairobi are procured along the institution’s regulations,” Mr Muli said.

The Constitution exempts projects funded through negotiated loans and grants from the provisions of the Public Procurement and Disposal Act 2005.

“Where any provisions of this Act conflicts with any obligations of the Republic of Kenya arising from a treaty or other agreement to which Kenya is a party, this Act shall prevail except in instances of negotiated grants or loans,” the Act reads.