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Economy

State defends award of Sh1.2trn rail deal to Chinese firm

A Rift Valley Railways train. CBRC was contracted to build the Mombasa-Malaba Standard Gauge Railway without tendering. FILE
A Rift Valley Railways train. CBRC was contracted to build the Mombasa-Malaba Standard Gauge Railway without tendering. FILE 

The Ministry of Transport has defended the award of a contract to build the Mombasa-Malaba Standard Gauge Railway to a Chinese firm without tendering the Sh1.2 trillion mega project.

Cabinet secretary Michael Kamau told Parliament on Thursday that China Bridges and Roads Company (CBRC) was awarded the tender through a pact negotiated between Beijing and Nairobi that provided that the contract be offered to a Chinese firm.

CBRC was awarded the contract in 2011 after signing an MoU, in which the Chinese contractor promised to assist in facilitating a government-to-government deal supported by concessional loans from China Exim Bank.

Consultancy contract

The deal included an offer to conduct a feasibility study for the government free of charge on the understanding that the contract would be awarded to CBRC without competitive bidding.

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Kenya Railways was just about to award the consultancy contract to Italian firm, Italfer SPA, when it was ordered by the Ministry of Transport to stop the process.

The Transport committee of Parliament is investigating the reasons for the single-sourcing of the contractor for the mega project and the firm’s capacity to deliver.

Mr Kamau said CBRC had the technical and financial muscle to deliver within the next three years.

He added that the Chinese firm had operations in 40 countries and had undertaken several large railway development projects in China, including the Beijing-Shanghai High Speed Railway, Harbin-Dalian passenger dedicated line and Guangkun mixed traffic railway.

“The corporation serves as a window and platform for the overseas operations of China Communications and Construction Company Limited,” the Minister told MPs.

The standard gauge railway is set to be completed in 2018 and will be part of a seamless system connecting Nairobi, Kampala and Kigali.

President Uhuru Kenyatta is expected to launch the construction of the project next Thursday, Mr Kamau said.

He added that the completion of the rail-line will move 60 per cent of the cargo from the port of Mombasa to Nairobi and will take six hours compared to the present 15 hours.

Mr Kamau said the current network handled 0.9 million tonnes in the year to last June compared to Mombasa Port throughput of 22 million tonnes in 2012.

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