Fresh row hits standard gauge rail plan

Fresh controversy is stalking the multi-billion-shilling railway upgrade plan after MPs questioned an extra Sh3.27 billion that the government plans to pay to a consultant.

The National Assembly’s Transport Committee has also put the Kenya Railways Corporation (KRC) management on the spot for settling on a sister company to supervise the construction of the standard gauge railway (SGR).

On Tuesday, the MPs heard that the Third Railway Survey and Design Group Corporation (TSDI), which was hired as the independent consultant to review the designs of the SGR and supervise the project, will earn Sh3.27 billion or one per cent of project cost.

The amount is over and above the Sh327 billion that the Chinese and Kenyan government have publicly committed to finance the construction of the railway.

Just like the China Road and Bridge Corporation (CRBC) which is undertaking the actual construction of the 609km Mombasa-Nairobi railway line, the TSDI which will supervise its work is also owned by the Chinese government.

“How will two sister companies, all reporting to one entity supervise and construct the same project? Are you sure that Kenyans will get value for money?” asked Wajir MP Mohamed Abas.

The SGR project has in the past been dogged by opposition from a section of politicians and legal battles that have since been resolved by courts.

But KRC managing director Atanas Maina told the committee chaired by Starehe MP Maina Kamanda that despite the fact that the two companies are owned by the government of China, they are independent in management and boards.

He said there will be no conflict of interest between the two firms. “The two companies are state-owned enterprises which are governed by the State-owned Asset Supervision and Administration Commission of the State Council,” Mr Kamanda told MPs.

The KRC boss, Mr Atanas Maina, was last week grilled by the Public Investments Committee (PIC) over the same issue.

Parliament approved the PIC report on the procurement of the SGR tender with a recommendations that an independent consultant be procured to manage, supervise and review the designs for the railway.

READ: Parliament now gives new railway line the go-ahead

Mr Maina defended the procurement of the lead consultant, saying its quote of $41 million was the lowest.

“Yes I agree that the two companies are State-owned enterprises but they are separate entities doing separate functions with separate management and boards. They are under the overall supervision of a company wholly owned by Chinese government to manage public entities,” he said.

The Chinese contractor won the consultancy tender after partnering with local companies – Apex and Edon Limited – in a deal that will see the two firms undertake 60 per cent of the consultancy works while Chinese professionals take the rest.

Mr Kamanda directed Kenya Railway to provide the directorship and shareholding of the local consultancy firms. He also sought information regarding any due diligence that was carried out in awarding the tender.

“If it will come out to be seen you awarded a contract to the same people, then this will be a big scandal and Kenyans will not get value for their money,” he said.

Mr Maina told the committee that Kenya Railway in consultations with the National Land Commission has gazetted 172 kilometres of land that will be hived off for the project.

Out of the 172 kilometres, 133 kilometres will be taken away from Tsavo National Park and five kilometres off the Nairobi National Park.

“We are negotiating with Kenya Wildlife Service who will give us the land in return for a similar acreage taken. The National Land Commission says we can’t pay a government institution that is giving another the right of passage. What we will do is to secure acreage to compensate what we will take,” Mr Maina said.