Fascinating twist as AG ask for Halt on Rail deal


AG MuigaiThe controversy surrounding the multi-billion standard gauge railway tender award took a fascinating twist yesterday when Attorney General Prof Githu Muigai called for its cancellation. He said the tender was unconstitutionally awarded with the entire procurement process having been overlooked.

Appearing before the Parliamentary Investment Committee (PIC), the AG said he stood by his opinion on the project which he had given to the Public Procurement Oversight Authority (PPOA) that the procurement of the tender be subjected to the Public Procurement and Disposal laws.

The AG had advised that the process used to award the China Roads and Bridges Corporation (CRBC) the contract to build the railway was not backed by the Constitution. Yesterday Muigai told the Adan Keynan-led House committee that the process should thus stop since due diligence was not followed. “I stand by earlier opinion. I advised the Managing Director, PPOA cautioning him against going ahead with the process but he did not come back to me,” Muigai told the members.

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He further explained that he had told both the PPOA and the management of the Kenya Railways Corporation that he was ready to clear the project, but only if his office is availed the financing agreement. “With these documents, we will have no problem but to clear the contract,” the AG told the committee. The committee heard that despite the AG’s opinion, PPOA went ahead to approve the project.

There was no evidence to show that the deal was government to government as alleged by the KRC but involved the corporation and the Chinese company. The government of Kenya was to provide 15 per cent of the total amount while China through Exim Bank was to provide the rest. It was on this basis that the A-G found it prudent to subject the process to an open procurement process as required for by law.

He explained that in his opinion Kenya’s procurement law remains in force in situations where the government has committed own money. “In cases where the government contributes from her own resources, and in any form, to any procurement process under such agreement or treaty, the Act applies,” the AG wrote in his response to PPOA. Asked by Chuka Igamba Ng’ombe MP Muthoni Njuki what repercussions the country would face should the contract be cancelled, Muigai said nothing would be incurred since the finances had not been released.

And in another confusing revelation, Finance Cabinet Secretary Henry Rotich told the committee that the actual cost of the project would be Sh 447.5 billion as opposed to Sh 327 billion given by Transport Cabinet secretary Michael Kamau when he appeared before the same committee. Rotich told the committee the government had sourced for many years for a contractor to engage in the project but in vain.

“It was the Chinese company who showed interest to participate, nobody else was interested in funding the project, we had tried many others but in vain,” Rotich said. The government, he said, had to undergo all the risks involved to realise the project. However pressed by members to explain whether the deal was a government to government venture, Rotich sought to explain that it was the KRC which was involved and not the government although the Treasury was sourcing for the funding.

But his Principal Secretary Kamau Thugge sought to explain the government to government process, disputing the argument by committee vice chairman Kimani Ichungwa that it ought to have been brought before parliament if it involved the two governments, a requirement in law. But Thugge said that parliament had allowed such processes, having approved loans by donors in the budget.

And yesterday, the management of the Chinese company was given a seven-day notice to appear before the committee after failing to honour an earlier notice to do so. Committee chairman Adan Keynan said the management of CR&BC were invited to appear on January 7 but did not respond. When he appeared before the committee on Monday, Kamau said the Kenyan government was pushed to work under the conditions set by the Chinese government which includes awarding the tender to a Chinese company.

It, therefore, meant that the procurement of the tender could not be subjected to the Public Procurement and Disposal Act. Today the committee will grill the “scandal” whistle blower Nandi Hills Member of Parliament Alfred Keter. He will be accompanied by his lawyer Ahmednassir Abdullahi. The youthful MP will be expected to furnish the committee with details of other interested companies who wanted to bid for the contract but were barred following the action taken by the government. – By ANTHONY MWANGI


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