Kenya: Public Investments Committee special report on the Standard Gauge Railway Phase I (2014)

Which committee reported

This record covers the PIC special report. No Public Accounts Committee report on the SGR procurement was located for this page, and the Parliament of Kenya library lists the SGR inquiries under the transport committee ^2,4. The copy of the PIC report used here is hosted by the Africa Centre for Open Governance (AfriCOG) ¹.

What the committee recorded

The committee found the need for the SGR "well entrenched" in Kenya Vision 2030 ¹. It noted that CRBC initiated the project, did the feasibility study, design and costing, and then won the tender, which it said raised conflict of interest concerns and a lack of competition ¹.

The committee recorded that USD 3.233 billion had been identified from the Government of the People's Republic of China, 85% of the cost, with the Government of Kenya covering 15% ¹. It said the financing agreement had not been signed and no funds had been disbursed ¹. It gave the civil works contract price as Kshs 220,921,502,221.08 ¹.

The recommendations

Shortened, with the numbering used in section 1.6 of the report ¹.

• 1.6.1: the project "should proceed on condition" that the government fast-tracks Phase II studies and procurement, sources funding and procures an independent consultant for design review and supervision ¹
• 1.6.2 and 1.6.3: Kenya Railways to address issues from the feasibility study and connectivity ¹
• 1.6.4: the Treasury and Transport Cabinet Secretaries to form an inter-ministerial technical and implementation team ¹
• 1.6.5: "The Government adopts Public Private Partnership arrangement in the operation of train services." ¹
• 1.6.6 and 1.6.7: operational challenges of a single line track and capacity development ¹
• 1.6.8: "The National Treasury should finalize the negotiations on the financing agreement" for Phase I ¹
• 1.6.9: an inter-ministerial team to give an accurate total cost estimate, including land, taxes and financing costs ¹
• 1.6.10: Kenya Railways to hasten procurement of an independent consultant ¹
• 1.6.11: liaison with the Government of Uganda ¹
• 1.6.12 and 1.6.13: the Registrar General to deregister China Road and Bridge Company Kenya Limited, and the CID to investigate its missing file ¹
• 1.6.14: compliance with Article 227 of the Constitution ¹
• 1.6.15: government review of the "Take or Pay" proposal between Kenya Railways and the Kenya Ports Authority ¹
• 1.6.16 to 1.6.18: Railway Development Fund governance, domestic resources and budgeting ¹
• 1.6.19: the financing agreement to state that EXIM Bank of China financing covers the line, civil works, rolling stock and locomotives ¹
• 1.6.20: that former Transport Minister Amos Kimunya be prosecuted by the Director of Public Prosecutions "for contravening Article 125 read together with Article 35 (1) (b) of the Constitution" and provisions of the National Assembly (Powers and Privileges) Act and Standing Orders, for contempt of the committee and failing to answer its questions. This is a recommendation, not a charge or a court finding ¹
• 1.6.21 to 1.6.23: the procurement oversight authority, commissioning before funding, and Attorney General scrutiny of the Tripartite Agreement ¹

What later reports record

The Departmental Committee on Transport, Public Works and Housing reported on the status of Phase I and II in July 2016. It adopted the report on 24 June 2016 ³. The library record gives an issue date of 4 October 2016 ².

That report says a contract for design review and supervision of Phase I was signed with the TSDI-APECEDON Consortium on 3 June 2014 ³. It says "the remainder (90%) of the cost is funded through commercial and concessionary loans from the EXIM Bank of China" ³. The PIC report gave the Chinese share as 85% ¹. The two figures are shown here as each report states them.

For Phase 2A, Nairobi to Naivasha, the 2016 report gives a commercial contract dated 19 September 2015 and a financing agreement signed on 3 December 2015 or dated 4 December 2015, as it states both ³. It recommended that the contractor operate the line after completion, giving different minimum and maximum periods in different sections ³.

In June 2022 Brian Kimani of Kenyans.co.ke reported a separate PIC recommendation that Kenya Railways recover SGR overpayments "within three months of the adoption of this report" ⁵. The transport committee reported on the use of the SGR on 22 September 2020 ⁴.

Outcome status