Come clean on Sh500b SGR deal, Mudavadi tells State

Monday, June 22nd, 2020 00:00 |
ANC leader Musalia Mudavadi addresses the press at a past event. Photo/PD/FILE

Irene Githinji @gitshee

Amani National Coalition (ANC) party leader Musalia Mudavadi yesterday told the government to come clean on the multi-billion-shilling Standard Gauge Railway (SGR) deal following the Court of Appeal’s move declaring the entire contract as unconstitutional.

Mudavadi urged National Treasury Cabinet secretary Ukuru  Yatani and his Transport counterpart James Macharia to explain what it meant for the money already spent in the project, now that so much has gone through a process found riddled with illegalities.

“A few things arise, that if indeed the Court of Appeal has come to the conclusion that there were illegalities, we need to pose a few questions that Kenyans deserve answers from Yatani and Macharia because this squarely fall within their dockets,” said Mudavadi, who spoke from his office.

“Yatani and Macharia, its upon you to explain to Kenyans so that the level of anxiety that maybe emanating both locally and internationally with this ruling can be managed,” he added.

International investors

He also wants the two CSs to explain to Kenyans how the pronouncement plays out with international investors, especially the Chinese government a key financier of the project, its impacts and on the broader debt profile that is hurting Kenyans.

Mudavadi also called for urgent discussions to reschedule public debt.

“The Court of Appeal made a pronouncement regarding the SGR, an investment of more than Sh500 billion, the largest single infrastructure that Kenya has made up to date. 

“We must make investments that will help the country and it is my wish that SGR will ultimately bring value to Kenyans and the economy of the region,” Mudavadi said.

He termed as disturbing the fact that the Court of Appeal unanimously came to the conclusion that the contractual arrangements and procurement process that followed thereafter between the Kenyan institution, lending and implementing institutions has some serious challenges, bordering on illegalities.

“This is a very worrisome finding by the Court of Appeal. If some of the processes were illegal what does that portend for the debt profile around this project?” he posed.

Some of the issues which require an explanation, said Mudavadi, were those surrounding SGR funds since most were borrowed.

Also with the pronouncement, Mudavadi sought an explanation on what it means for the Authority to Incur Expenses (AIE) holders, who have to continue disbursing funds for this project.

This is particularly so since they are now aware that the Court of Appeal has made serious pronouncement and Kenyans should be able to know how much has been disbursed and what it means in light of this ruling.

Owing to the said illegalities, Mudavadi also said National Treasury should explain what it means on the expenditure associated with this process.

“These are serious questions and as Kenyans a good explanation will be necessary, a well thought and logical explanation, which Kenyans and also our international partners deserve,” said Mudavadi.

 “We want to be clear on whether we have walked into an extremely difficult situation and what will be the levels of accountability in what the appeal court has pronounced,” he added.

Mudavadi has been at the forefront agitating for avenues that will see Kenya renegotiate her public debt, saying that the Court of Appeal ruling could put Kenya at crossroads with the international donor communities.

Judges’ ruling

Last week, the Court of Appeal declared Sh500 billion contract between Kenya and China for the construction of Standard Gauge Railway illegal.

The three Court of Appeal Judges Martha Koome, Gatembu Kairu, and Jamila Mohammed said the government failed to follow procurement laws while contracting China Bridges and Railway Corporation (CBRC)  for the project.

During the appeal, it emerged that Kenya Railways Corporation (KRC), which was the implementer of the project on behalf of the government, head-hunted CBRC as a contractor before Kenya and China’s Exim bank sealed a financing deal.

This, the judges ruled, went against the procurement law and the Constitution. 

The judges also found that Kenya Railways contravened section 29 of the Public Procurement and Disposal Act, 2005, which provided for open tendering.

The government has completed phase one of SGR from Mombasa to Nairobi that cost Sh327 billion. 

Phase two to Naivasha cost Sh150 billion.  The final phase from Naivasha to Malaba is projected to cost Sh380 billion.

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