Kenya: MPs Probe Ownership of Chinese Railway Company
22 January 2014
The Satr 21/01/2014
The Public Investments Committee of the National Assembly has asked for more details about the company that won the tender to build the Sh320 billion standard gauge railway from Mombasa to Nairobi.
The MPs say that the company is registered as China Roads and Bridges Corporation in Kenya and therefore it cannot be a Chinese state company. The MPs want to uncover the directors and shareholders.
"There is no way a government entity can be registered this way. It could be an avenue by a few individuals in the country who would want to use the loophole to fleece public funds without following the procurement rules. That could be the reason why there was no competitive bidding process and the AG was not properly involved," said MP Chris Wamalwa.
Committee chairman Adan Keynan directed the Public Procurement Oversight Authority director general Maurice Juma to get the information for the committee within seven days.
The committee also established that the PPOA ignored the advisory opinion of the Attorney General Prof Githu Muigai. Last year he gave an opinion that a government to government deal is still a method of procurement, so no government contract should be single sourced.
However the PPOA went ahead to accept a letter written on March 14, 2013 by then Kenya Railways Corporation managing director Nduva Muli exempting the contract from single sourcing.
"It's shocking that an oversight entity can take directions from an institution that it is supposed to oversight. You acted on the instructions of the Kenya Railways Corporation and disregarded the opinion of the AG who is the legal government advisor," Keynan (Wajir West) said after committee members Kimani Ichungw'a (Kikuyu), Olago Aluoch (Kisumu Town West) and Wamalwa (Kiminini) complained.
However Transport Cabinet Secretary Michael Kamau and his PS Nduva Muli appeared before the committee to defend the project. "I have dealt in so many projects and in all the cases we set aside the procurement law and use the African Development Bank conditionalities. It is even applicable in the European Union funded projects," said Kamau.
"We have always used the procurement rules of the partners providing the money. Therefore setting aside PPOA Act is not unique to this project," he said.
The committee has also invited Transport committee chairman Maina Kamanda to say what he knows about the project. Kamanda has reportedly visited China on a trip funded by CRBC.
"Six members of his transport committee including himself visited China. We want to know the basis of the trip and what he knows about the railway project because people could be playing on the minds of Kenyans.
Previous financial scandals such as Anglo Leasing and Goldenberg were triggered in similar ways," Wamalwa said.
Kenya Railways Corporation acting CEO Alfred Matheka appeared in the morning and said the Railway Development Fund and the budgetary allocation will provide Sh50 billion shillings, or 15 percent of the cost.
The committee is today expected to meet Treasury Cabinet Secretary Henry Rotich in the morning and the Attorney General in the afternoon.
Original article by David Mwere