The Supreme Court, on Friday, June 16, nullified the Court of Appeal ruling, which had determined that procurement regulations were violated in the Ksh500 billion Standard Gauge Railway (SGR) agreement between Kenya and China.
The 5-judge bench comprising Deputy Chief Justice, Philomena Mwilu and justices, Mohamed Ibrahim, Smokin Wanjala, Njoki Ndung'u, and William Ouko declared that the procurement process for the Standard Gauge Railway project adhered to the provisions outlined in Article 227 of the Constitution.
In their ruling, the judges also observed that the procurement was undertaken as a government-to-government contract and hence exempt from the provisions of the Public Procurement Disposal Act, 2005.
"In addition, the SGR project was subject to interrogation before Parliament in two committees, and none of the respondents opted to be involved. The said parliamentary process, which is open to the public, cleared the projects. Under our constitutional design, the people have the power to exercise their oversight power through elected representatives who are domiciled in Parliament. Whether a citizen agrees with or was satisfied with what was undertaken is a matter of conjecture, provided that the laid-out procedure was followed.
"In the premises, we respectfully disagree with the appellate court and hold that the procurement process for the SGR project met the requirements of Article 227 of the Constitution as read together with the provisions of the PPDA, 2005," the verdict by DCJ Mwilu read.
The late President Mwai Kibaki initiated the SGR deal with contracts approved by President (Rtd) Uhuru Kenyatta's administration.
Busia senator and activist, Okiya Omtatah, filed a petition at the High Court challenging the procurement process for the construction of the SGR and the resultant contracts awarded to the China Road and Bridge Corporation (CRBC).
The Law Society of Kenya also asked the High Court to bar CRBC from constructing SGR. The petitions filed in February and May 2014, argued that there was a lack of due diligence on the part of the government.
Uhuru's administration faced criticism for not conducting an independent feasibility study and failing to evaluate the project's design prior to selecting a contractor and assigning the project to CRBC. This was particularly concerning given the reported blacklisting of the company by the World Bank in January 2009.
According to the activists, single sourcing or direct procurement for a mega project such as the SGR was illegal. They thus argued that the government should have issued a restricted tender inviting other Chinese firms with the requisite qualifications to bid for the contract.
The High Court, in a judgment issued by Justice Isaac Lenaola (now Supreme Court judge), dismissed the consolidated petitions in November 2014 on the basis of technicalities.
Omtatah and LSK moved to the Court of Appeal to seek legal redress. The appellate court's objective was to ascertain whether there were flaws in the procurement laws pertaining to the case.
The Court of Appeal upheld the High Court’s decision save for setting aside the finding that the procurement of the SGR project was exempt from the provisions of The Public Procurement and Asset Disposal Act, 2005.
It also ruled that Kenya Railways Corporation failed to comply with, and violated the provisions of Article 227 (1) of the Constitution, Sections 6(1) and 29 of the PPDA, 2005, in procuring the SGR project.
Kenya Railways thus proceeded to the Supreme Court, which overturned the ruling.
