The Chinese contractor, China Road and Bridge Corporation (CRBC), that built the Standard Gauge Railway (SGR) in Kenya allegedly denied a team that was set up to investigate a 'ghost' company that was approved to run the project access to crucial documents.
Comprising of the Presidential Delivery Unit, the Office of the Attorney-General, Kenya Railways, Ministry of Transport, the National Treasury and also CRBC officials, the team was formed to investigate contracts between Kenya and Africa Star Railway Operation Company Ltd, a Chinese firm operating the Ksh327 billion SGR.
According to the Daily Nation, CRBC who contracted the company claimed that they could not release the information on the grounds that it was “sensitive and private”.
“The negotiation for a review of the operation and maintenance contract did not progress because the operator refused to provide information that would enable the team to determine reasonable costs of SGR operations,” a highly-placed source disclosed to the publication.
The team was led by Transport PS Esther Koimett and after a number of preparatory meetings, the process stalled and appeared to have been shelved altogether.
“We asked for data to help us come up with the regression analysis formula and inform the renegotiations, but this was not provided,” the source further told the publication.
According to a report released in July 2019, Kenya Railways owes CRBC over Ksh31 billion in fixed and variable costs, which have to be paid by Treasury since the operator had not been able to break even.
This information comes to light at a time when the government is said to be preparing itself to pay its first installment of the SGR loan amounting to Ksh25 billion in January 2020.
Daily Nation further revealed that the loan was for the construction and locomotives maintenance and December 2019 was the expiry of the five-year grace period in line with the May 11, 2014 loan agreement.
The NMG publication further revealed that the government had already set aside Ksh35 billion in the supplementary budget to take care of the repayment to China’s Exim Bank.
By the end of 2020, the government will be expected to have paid at least Ksh 50 billion of the Ksh327 billion.
President Uhuru Kenyatta during a live TV interview on December 28, 2018, promised to release the SGR contract to put to rest any rumours that the Chinese could seize the Port of Mombasa if Kenya defaulted on its payments.
