State keeps railway board ‘in the dark’

By WILFRED AYAGA

Kenya Railways Corporation (KRC) is in the dark over how long it will take the Government to agree with the main financier of the controversial standard gauge railway, a parliamentary committee was told Wednesday.

KRC board of directors chairman Jeremiah Kianga told the Public Investments Committee (PIC) that details were scanty on when the negotiations between the Government and Exim Bank of China would end to enable the project begin.

Consequently, he said the board had taken a cautionary approach to the whole project. “We decided to be cautious on issues touching on the project since the negotiations are still on going,” General (Rtd) Kianga told the committee at a meeting in Nairobi’s Continental House yesterday.

According to an agreement between the Kenya and Chinese governments, the Chinese bank was to provide 85 per cent of the total financing, with the Government providing the balance.

Negotiations

Part of the Government financing was to be raised through the Railway Levy Fund, which is 1.5 per cent on all imports.

Kianga told the committee that Kenya Railways was waiting for communication from the Government on the current status of the negotiations. He revealed that the government-to-government nature of the project meant that the KRC board only plays advisory and consultative roles in the process.

“The government-to-government arrangement means the negotiations were taking place at ministerial level. We were only part of the process as advisers and consultants,” Kianga told the House team.

He added that the KRC board is yet to receive figures of the actual cost of the project from Treasury.

“We have not received communication from Treasury on the actual figures. What we know is that negotiations are still going on,” Kianga said.

The KRC chairman defended the single-sourcing arrangement.

 “Since the amounts involved were large, it could only be undertaken efficiently through a government-to-government transaction,” he said.

Among the factors that may further affect the cost of the project, according to Kianga, is the amount of compensation to be paid to Rift Valley Railways (RVR) in case its operations arbe affected by the construction of the new line.