Govt to Kick Out Chinese Company Behind SGR

  • President Uhuru Kenyatta flags off SGR Phase 2A at the Nairobi Terminus on Wednesday, October 16, 2019
    Former President Uhuru Kenyatta flags off SGR Phase 2A at the Nairobi Terminus on Wednesday, October 16, 2019
    PSCU
  • The Chinese company behind the construction of the Standard Gauge Railway (SGR) is facing deregistration and prohibition from operating in Kenya.

    In a gazette notice on February 12, the Government through the Registrar of Companies stated that unless the China Communications Construction Company (CCCC) met certain conditions it would be dissolved. 

    "Pursuant to section 894 (3) of the Companies Act, that unless it is shown that the company listed below is carrying on business or in operation, the Registrar shall have the company struck off the Register and the company will be dissolved," the notice signed by Karen Ndegwa for the Registrar of Companies disclosed.

    Passengers travel to Mombasa using a Madaraka Express train at the Nairobi terminus in Syokimau.
    Passengers travel to Mombasa using a Madaraka Express train at the Nairobi terminus in Syokimau.
    File

    A number of companies were also listed for dissolution in the notice with 80 firms operating in various sectors including consulting, finance, hospitality and travel.

    Another 60 companies operating in the country were issued with a notice of intended dissolution and given three months to show cause why they should not be dissolved.

    Among those facing dissolution is the China Africa Consulting Service Company Limited, an independent Africa and China-focused advisory firm that works to assist governments, organizations and companies to foster sustainable development in African countries.

    The CCCC is instrumental in the construction of the Nairobi-Naivasha line, where it boasts of employing over 26,000 Kenyans.

    The company stated that the number accounted for 90 percent of its workforce along the line, and had created more than 20,000 jobs indirectly by cooperating with local material suppliers and companies.

    In November 2020, KeNHA awarded the company a contract for the construction of the Ksh4.5 billion Makupa bridge in November 2020.

    A subsidiary of the company, China Roads and Bridges (CRBC), has also undertaken major multi-billion projects in Kenya including the Nairobi Expressway.

    CRBC was contracted for the first and second phase of the SGR from Mombasa port to Naivasha in collaboration with Kenya Railways.

    The government had earlier partnered with a private investor to finance Phase 2 of the project under a Chinese contractor but later on, bailed after the contractor added an extra Ksh50 billion to the bill of cost. This stalled the project that was to be completed in eight months.

    Chinese nationals at work during the construction of the SGR.
    Chinese nationals at work during the construction of the SGR.
    File