Details of Sh250 Billion Controversial Deal Kenya Signed 3 Days to August Election

  • New revelations have emerged on a multi-billion controversial deal the Kenyan government and American construction firm Bechtel International Inc. got into, three days to the August 8th election.

    Bechtel was tasked with one of the biggest infrastructure projects in East Africa, constructing a 473-kilometre high-speed expressway from Mombasa to Nairobi.

    The expressway will be a toll road, that is, motorists will have to pay to use it.

    The initial press release sent to media houses on Saturday 5th August lacked a number of key details that are usually announced, most importantly the cost.

    According to a report in the Financial Standard, the Kenya National Highways Authority (KeNHA) has refused to give a cost range of the project on grounds that it does not want to speculate.

    A brief by the State Department of Infrastructure questions why a previous model for the project financed by the World Bank was dumped and whether the Government to Government, single-sourcing route offers Kenyan taxpayers value for money compared to a competitive bidding process.

    It estimates that the total price of the contract will not be under $2.5 billion (Sh250 billion).

    Kenya will borrow funds from American lenders, US Exim Bank and through Overseas Private Investment Corporation (OPIC). 

    The brief notes that Bechtel will be paid $ 400 Million (Sh40 Billion) before the start of the project partly as an advance and for what the company describes in it's proposal as 'establishment fee'.

    A former Vice President of the firm is serving a 42-month jail term for pocketing Sh520 Million in kickbacks after he manipulated a competitive bidding process for State-run power contracts in Egypt.

    The company is also in court fighting bribery allegations in a Saudi Arabia family feud. There were other allegations in British courts over middlemen used to win a contract in Abu Dhabi to build a petrochemicals plant.