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Turf wars in government derail JKIA railway link

Terminal 1A at JKIA in Nairobi
Terminal 1A at JKIA in Nairobi. FILE PHOTO | NMG 

Turf wars and tendering fights have derailed construction of a railway line linking Jomo Kenyatta International Airport to Nairobi’s city centre, leaving a deal inked by French President Emanuel Macron and his Kenyan counterpart Uhuru Kenyatta on the verge of collapse.

The Treasury has raised the red flag over the secret procurement of a consortium of French firms to build the new railway line whose costs have not been made public, and has declined to commit funds following a request from the Ministry of Transport.

The Transport ministry informed the Treasury that a consortium of five French companies led by Egis Group had been tapped for the railway project on the back of a financing deal provided by Paris and commercial lender BPI France Assurance Export , drawing protests from Kenya Railways.

Kenya Railways says procurement of the French firms is illegal and accused the ministry of meddling in its regulatory responsibility of initiating and managing railway projects, which saw it shepherd the construction of the standard gauge railway (SGR) line.

The turf wars also hinge on revelations that the Cabinet is yet to approve the JKIA rail project despite the deal being part of a multi-billion shilling trade agreement that Mr Macron signed with Mr Kenyatta during his March 13 Kenya visit.

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"In order for the National Treasury to consider the project for funding, the ministry is requested to submit…a Cabinet approval for the project," Julius Muia, the Treasury principal secretary, said in a letter to his Transport counterpart, Charles Hinga. "Clarity on how the French consortium was procured to undertake the project," added the letter seen by the Business Daily.

In a bid to salvage the JKIA deal, Mr Hinga belatedly roped in Kenya Railways in an effort to convince the Treasury to back the project, especially the debt transaction.

But Kenya Railways disowned the transaction, arguing that the Transport ministry has no role in a project modelled as a public-private partnership (PPP)—where private financiers build infrastructure and recoup their investments through avenues such as tolling.

"Kenya Railways does not have a contract with French consortium of companies and has not initiated any procurement for the same," Kenya Railways managing director Philip Mainga informed Mr Hinga.

"The project hierarchy would be from Kenya Railways as the contracting authority to PPP unit, Debt management office and finally approval by PPP committee. The project appraisal provided by Egis has not complied with PPP Act 2013."

The consortium of French companies includes Egis, Sogea-Satom, Alstom, Thales and Transdev—major players in the rail transport business.

Construction of the rail link to JKIA was expected to be completed in 2021 and Mr Macron viewed it as one of the key projects to cement bilateral ties between Nairobi and Paris, promising to provide sustainable financing projects in what was seen as dig at China.

China has provided nearly Sh500 billion in loans for construction of the SGR line from Mombasa to Nairobi, but some critics have expressed concerns over the country’s growing debt burden and Chinese loans.

China had earlier expressed interest in expanding the SGRline to JKIA and the city centre via Syokimau. But the plan was termed costly and shelved.

Sources familiar with the rail deal see the hand of Chinese in blockade of the French deal.

"We knew they would be unhappy and most likely the reason why it is becoming hard to award the French the same deal," said a top official at the Transport ministry who requested not be named.

Mr Macron’s joint press briefing with Mr Kenyatta was symbolic given its venue at the CBD railway terminus where the French leader repeatedly mentioned ‘sustainable financing’ and ‘respect for sovereignty’ in what was his way of saying that Paris funding was better than Chinese.

"We want to create a Public Private Partnership through French consortiums and the Kenyan government to provide sustainable financing," Mr Macron said. "Long-term loans create too much dependency and that is what increases the exposure of your country. I fully believe in the sovereignty of the people and I believe Mr Kenyatta sees it the same way too."

Mr Macron’s push for partnership saw various French firms sign deals worth over Sh300 billion during his two-day visit.

The French-Chinese rivalry over the railway deal played out immediately Mr Macron left Kenya.

The Chinese Embassy in Nairobi organised a tour of the SGR project the following week, inviting Kenyan government officials, MPs, journalists and scholars.

The JKIA-Nairobi city centre railway line was planned to decongest the capital city and reduce the time taken between the central business district and the region’s largest international airport—which handled 11.7 million domestic and international fliers last year.

The distance between JKIA and Nairobi city centre is 20km and should take between 30 minutes to less than an hour.

However, travel time takes up to two hours due to traffic on the usually busy Mombasa Road.

France has since last year been angling to be a major player in the Kenyan railway transport business, culminating in a deal between Kenya Railways and French shipping line and the third largest globally, CMA-CGM.

The French shipping line committed to freight its Kenya cargo from the Port of Mombasa to Nairobi Inland Container Depot via the SGR line.

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