The Railway Saga Continues

The Kenya railways in conjunction with the state-owned China Road and Bridge Corporation (CRBC) have launched a KSh1.3 trillion project to build the railway line between Kenya and Mombasa. The CRBC has offered to fund the first part of the project, Nairobi to Mombasa to the tune of $5.2 billion. This railway is expected to go all the way to Rwanda, Uganda and South Sudan. It’s expected to expand our areas of trade and create a lasting trade relationship with all the countries involved.

Mr. Zhang, the spokesperson for the China Communications Construction Company (CCCC), parent company of CRBC, says “The railway development will have the following immediate economic benefits: reduce the cost of transportation in the region making it an attractive investment destination and accelerate industrialization through easier and cheaper transport and the establishment of new industries to service the new railway,”
This project fits into the government’s vision 2030 plan and is President Uhuru’s brainchild. “The project will define my legacy as president of Kenya,” Kenyatta says “What we are doing here today will most definitely transform … not only Kenya but the whole eastern African region,”

However this project is marred with discrepancies. Some are calling it the biggest scandal yet with allegations of single sourcing the tender to one particular firm and raising the initial cost so as to line pockets both within the Kenyan govt and their Chinese counterparts. ‘The variations are shaping the railway project into the country’s biggest financial scandal, beating the Goldenberg, Anglo-leasing and Triton frauds.’ The standard, January 3rd 2014.

The agreed initial cost stood at Kshs. 220 billion when the job was tendered in July 2013 to the CRBC, it rose from that to a whopping Kshs. 1.3 trillion in only a few months. Apart from this there are a few other issues surrounding the railway. Our Kenyan Debt ceiling stands currently at Kshs.1.1 trillion or not more than half of our GDP. For this deal to go through the government will have to raise this ceiling and pass a bill to expand the current limit before committing the government to the loan agreement.

The Public Investments Committee (PIC) has been appointed to investigate the tendering process and to check whether there were any anomalies in the process. They promise a thorough investigation of the same and will have their report ready when the house resumes session.

ImageThis article was originally written for Mashada http://baraza.mashada.com/the-railway-saga-continues/