CS Michael Kamau says Chinese set out terms of SGR tender

Cabinet Secretary for Transport and Infrastructure Eng. Michael Kamau when he appeared before the Parliamentary Public Investment Committee at Continental house in Nairobi on Monday 20/01/14. [PHOTO:  BONIFACE OKENDO/STANDARD]

NAIROBI, KENYA: Transport Cabinet Secretary Michael Kamau told the committee investigating the Standard Gauge Railway (SGR) tender that procurement laws were set aside in the negotiations with the Chinese authorities.

Kamau told the Public Investment Committee that the Government had to work under the conditions set by the China government, and thus the procurement of the tender could not be subjected to the conditions set under the Public Procurement and Disposal Act.

The Government also had to accept a stringent requirement to pay 6.93 per cent of the commercial loan, a figure amounting to Sh14 billion, as an insurance sum for the project.

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He said ignoring the procurement laws is standard procedure that the Government follows whenever it is undertaking a project that is funded by development partners.

“Without exception, we go by the conditions set for us by the financiers. We set aside what our local laws stipulate whenever we are using funding from development partners,” said Kamau.

In addition, he said by-passing the procurement law was not unique to the SGR case as similar conditions also apply to projects funded by the European Union, African Development Bank and even the International Monetary Fund.


“Unless you tell us that we have always been wrong, that is how we have been doing it on the many projects that we have dealt with,” he said Kamau.

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The committee, chaired by Eldas MP Adan Keynan, had questioned Kamau as to why the tendering process was not competitive, yet Chapter 6(3) of the Act stipulated that if the Government would partially fund the project then it should be subjected to the procedures of a competitive procurement.

Instead, the project was undertaken under Chapter 6(1), which exempts the process of competitive procurement, but only refers to a tender wholly funded by a donor or a development partner.

About 85 per cent of the project is funded by the Chinese government through Exim Bank while the Kenya Government will pay the balance.

Kamau further said unlike such countries as Japan, China does not subject its companies to competitive bidding and thus the China Roads and Bridge Corporation (CRBC) was handpicked. On claims that Attorney General Githu Muigai had faulted the procurement process and even written to the Public Procurement Oversight Authority on the same, Kamau said the same officer had cleared all documentation relating to the government-to-government dealings and given the process a clean bill.

Standard Gauge Railway Michael Kamau China Roads and Bridge Corporation