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SGR deal: CS Kipchumba Murkomen publishes load of hot air

Transport Cabinet Secretary Kipchumba Murkomen. [Boniface Okendo, Standard]

On Sunday evening, Transport Cabinet Secretary Kipchumba Murkomen joined the fray of the bulging list of senior government officials playing games with the Kenyan public on the actual content of the Standard Gauge Railway project details.

Despite promising to lay bare the hitherto hidden contract, Murkomen hastily posted on his Twitter three front-pages of three agreements, and avoided the elephant in the room- the commercial contract.

In effectively joining the game of musical chairs which has featured among others retired President Uhuru Kenyatta, Murkomen unveiled the “buyer credit loan agreement” between the government of Kenya and the Export-Import Bank of China (EXIM) and the “preferential buyer credit loan agreement” between same two entities.

The third document was yet another “buyer credit loan agreement” relating to the Nairobi-Naivasha SGR extension.

He did not post the commercial contracts between Kenya Railways Corporation (KRC) and the China Road and Bridge Corporation (CRBC) on both civil works and locomotives.

“Waziri, share with us the Commercial Contract valued at USD 3,804,192,784.92 and any addendum. What you posted is just of the many financing agreements between Kenya and Exim Bank of China,” Senior Counsel Ahmednasir Abdullahi challenged him.

The contract Abdullahi was speaking of is two in one contract; one on “supply and installation of facilities, locomotives and rolling stocks” and the other on “construction of civil works” on Mombasa-Nairobi SGR project. Both are voluminous documents, now in our possession. 

The first to be signed was the civil works one at a cost of Sh220,921,502,221 and whose letter of award to CRBC went out on July 10, 2012. As soon as the offer landed, CRBC’s general manager Li Qiang dispatched an acceptance letter, same day.

“We take this opportunity to convey our appreciation for the award of the contract, and look forward to signing the commercial contract with you at the earliest time,” he said, raring to go.  

When it was finally sealed, this particular contract entailed over ten documents among them the contract agreement, letters of award, tender clarifications, conditions of contract, schedule of payments and contractors final proposal among others.

SGR train. Kenya borrowed $3.2 billion for the construction of the Mombasa-Nairobi line. [Edward Kiplimo, Standard]

This contract had a 60-month delivery period, and Kenya Railways was required to acquire the land for the project, 70 metres wide in open area and 100 metres in station areas. Kenya Railway was also responsible for construction of overpasses and underpasses across all existing facilities including roads and old railway.

This particular contract did not have confidentiality clause affecting KRC. The only confidentiality clause available affected the contractor, binding them to the privacy and confidential nature of the contract.

The sum of the second contract was thirteen items among them contract agreement, letters of award/acceptance, price of contract, scope of contract, schedules of payment, delivery and installation, training and technical assistance.

In the letter of award- part of the contract- dated October 3, 2012, the original contract sum was now in dollars, USD1,146,791,008.75. This was for “supply and installation of facilities, locomotives and rolling stocks for the Mombasa-Nairobi SGR project, and was exclusive VAT, custom duties, and other charges.

The contract was to run for 48 months. Qiang wrote back the following day giving “unconditional acceptance of the award.”

Section II of the contract contains the “conditions of the contract.” It is here that Kenyan government officials signed to confidentiality for what is otherwise a public project, but also- almost in contradiction- subjected the contract to governance of law of Kenya.

Economist Mohamed Wehliye suggests these clauses may have weighed heavily on government officials hence the monkey games they have been playing on the same.

“Of course the public have the right to know but release of the contract contravenes disclosure provisions in the contract. Kenya cannot disclose content of contracts without creditor consent,” he wrote.