Controversial Standard Gauge Railway to cost over US$12 billion

Kenya Railways

The cost of constructing Kenya’s controversial standard gauge railway will cost the taxpayers in the excess of Ksh1.3 trillion (US$12 billion) on completion of the two phases. The National Treasury Cabinet Secretary, Henry Rotich, had earlier told the Public Investments Committee that is investigating the viability of the project and the tendering process that it would cost the country Ksh447 billion (US$5.1 billion) to construct the first phase of the rail project from Mombasa to Nairobi.

The proposed first phase of the project launched in November last year passes through eight counties and has a total of 485.3km consisting of 33 yards. Kiminini MP Chris Wamalwa, however, told the committee the figure is expected to rise with the construction of the second phase from Nairobi to Malaba that also branches to Kisumu because of the hilly terrain and distance.

The committee also found out the railway line awarded to China Roads and Bridges Corporation will be constructed in line with the Chinese specifications. The revelations contained in the commercial contract between the Kenya Railways Corporation and the CRBC contradicts an earlier position taken by Transport Secretary Michael Kamau when he appeared before the committee. Kamau had said the Standard Gauge Railway will be done according to the American specifications.

The committee invited Transport PS Nduva Muli to appear as the former MD of Kenya Railways Corporation. Committee chairman Adan Keynan said Nduva, who oversaw the tendering process to CRBC and is also a prime witness in the probe, should explain all the issues raised by the members. Muli was also explain to the committee the route map of the railway line and the second contract on the supply of locomotives, passenger coaches and freight wagons at an extra cost of Ksh95 billion (US$1.1 billion). It is not clear why the government will commit itself to the purchase of rolling stock when the agreement for the operation on the railway line is ‘open access,’ where many operators will be allowed to operate in the freight business.

Appearing before the committee Muli said the Chinese company contracted to build the Standard Gauge Railway line is not incorporated in Kenya but has a registered office. However, he did not provide the names of the company’s directors. Probed further to present documents used in the registration, Muli was armed only with a letter from the Registrar of Companies confirming the change of name to CRBC and a registration certificate.

This comes days after it emerged that the CRBC file had gone missing at the Registrar of Companies after Parliament wanted to unmask the faces behind the company. Parliament has been pursuing a theory that CRBC Kenya may have one or more directors that are not Chinese in a bid to uncover the much-talked about brokers. Members of Parliament also want to know who the local shareholders are, if they exist.

Former Transport PS Cyrus Njiru failed to turn up as expected, but the committee extended another invitation for a week.

In furthering its probe, PIC has invited the Kenya Railways board members, technical evaluation committee, the tender committee and the registrar of companies to shed more light on the ownership and existence of CRBC- Kenya Limited.

While appearing earlier before the committee, former Transport Minister Chirau Mwakwere told the committee that CRBC is a credible firm having constructed the 1,390km Shanghai- Beijing railway. But the committee has information that CRBC was just a sub-contractor in the project and that various audits carried out in China had raised serious audit queries against the firm.

 

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