SGR, JUBILEE MOST EXPENSIVE INFRASTRUCTURE PROJECT IS UNLAWFUL, APPEAL COURT SAYS.

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BY SAM ALFAN

The Court of Appeal has declared President Kenyatta’s legacy project, the Standard Gauge Railway (SGR) unlawful as it failed to comply with the law.

At an exchange rate of $1 at Ksh100, the project cost up to Ksh 306 billion (US$3.6 billion) from Mombasa to Nairobi and is touted as the most expensive infrastructure project since Kenya gained independence.

The second phase from Nairobi to Naivasha is ongoing and is projected to cost Ksh 150 billion (US$1.5 billion).

In a judgment delivered yesterday, the Court of Appeal judges faulted Kenya Railways Corporation, saying as the procuring entity, it failed to comply with, and violated provisions of Article 227 (1) of the Constitution and Sections 6 (1) and 29, of the Public Procurement and Disposal Act, 2005 in the procurement of the SGR project.

Justices Martha Koome, Gatembu Kairu and Jamila Mohamed said that an arguement put forward by the Kenya Railways Corporation that engaging China Road and Bridge Corporation (CRBC) as the contractor was as a result of dictation by the financing agreement was inaccurate.

“We conclude, therefore, that the engagement of CRBC was not an obligation arising from “negotiated grant or loan” agreement for purposes of Section 6 of the Act, the judges said.

Mr Omtatah together with Law Society of Kenya (LSK) challenged the project arguing that it was signle-sourced yet it is financed by Kenyans.

The activist argued that the project was “a 100% Kenyan funded venture” and therefore subject to the standards and procedures laid out for the procurement of goods and services by public entities in the Constitution and the statutes.

The petitioners also said Kenya Railways violated the provisions of the Constitution because it was not subjected to open tender by inviting bids for the supply of the goods and services as required under Article 227 of the Constitution.

LSK and Mr Omtatah further said there was no due diligence, there was no independent feasibility study and design of the project and there was a conflict of interest in the Government contracting CRBC to implement the project whose feasibility study and design it had intriguingly carried out for free.

He also faulted the government for ‘christening’ the contract as a government to government contract.

But KR and CRBC defended the contract saying GoK entered into a financing agreement with Exim Bank of China for a concessional and commercial loan to support the project.

In a judgement in 2014, Justice Isaac Lenaola, the High Court judge, dismissed the petitions and allowed the construction to continue unhindered. The Activist and LSK moved to the Court of Appeal to challenge the decision.

In the judgement yesterday, the Judges dismissed claims by Mr Omtatah that Parliament was by-passed and that environmental considerations were not considered.

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