Kenya Railways disowns scheme to oust Chinese firm from running SGR
By Moses Michira | May 26th 2020
Kenya Railways Corporation has denied claims there are government efforts to kick out the Chinese-owned rail operator Afristar.
It follows day-long meetings and consultations on Sunday by top officials of the Ministry of Transport after details of the advisory were leaked and published in the Sunday Standard.
However, KRC acknowledges the legal advisory seeking to terminate the operations and maintenance contract and that they have since made ‘some developments on the negotiations’.
At the centre of the denial is the potential diplomatic fallout that kicking out Afristar, wholly owned by the Chinese Government via China Road and Bridge Corporation, could have.
China has funded up to 90 per cent of the estimated Sh500 billion that has been spent to construct the SGR from Mombasa to Naivasha.
But senior government officials have confirmed that the Solicitor General’s advisory still stands even though the interventions sought are around reviewing the cost of operating the SGR.
“The correct position is that the SG’s advisory only made a case against the extension of the Addendum for Phase 2A for a further period of three months, as the same invites an additional financial liability on KRC by way of fixed and variable costs payable to the operator,” said Philip Mainga, the managing director of KRC.
However, he appeared to contradict the Solicitor General’s opinion, which was expressly addressing the Phase 1 of the SGR that extends between Mombasa and Nairobi.
Kennedy Ogeto, the SG, had indicated in an advisory mid-last month that the operations and maintenance contract with Afristar should be terminated, as soon as next Saturday.
KRC holds the opinion that it was simply an advisory opinion, which however, cannot be understated as the main SGR construction and operations are basically bilateral between Kenya and China.
The SG’s office is tasked with following through on every contract entered between the Republic of Kenya and any other entities, in this case China.
KRC did not provide any update since the advisory was issued last month, with sources indicating that the parastatal has not responded to the Solicitor General’s position.
Further, efforts to obtain the original operations and maintenance contract failed as the officials claimed that there were confidentiality clauses, which bound the terms to secrecy.
It would be noteworthy that the same terms of the contract which KRC claims to be exploitative are the subject of a re-negotiation.
Done in secrecy
So secretive have been any contracts entered over the SGR that Kenya Railways has declined to provide the ombudsman any details of the agreements, even after the request was made under the Access to Information Act.
Mr Mainga told Lucy Ndung’u, the Commissioner for Administrative Justice (Ombudsman), that his hands were tied by the confidentiality clauses on the agreements on any facet of the SGR.
“Kindly note that the projects to which information is being requested...are projects between the Government of the People’s Republic of China and the Government of Kenya with Kenya Railways’ mandate solely being an implementing agency of the said contracts,” Mainga wrote on April 17.
He was responding to Ms Ndung’u’s request made on behalf of a Mr Khelef Khalifa, who had sought the intervention of the Ombudsman after failing to get documentation on SGR directly from the Kenya Railways.
It is a response that would help provide a rare view into the agreements relating to the SGR. Despite being managed under severely secretive terms, it is the taxpayer who will meet the entire cost and it is therefore only fair that they are involved.
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