House team wants Kenya Railways investigated over SGR

National Assembly’s Public Investment Committee Chairman Adan Keynan (left) and Francis Nyenze, a member, at a past meeitng. The committee has taken issue with the hiring of a consultant for the Standard Gauge Railway project. [PHOTO: FILE/STANDARD]

NAIROBI: A House committee wants top officials from the Kenya Railways Corporation (KRC) investigated and prosecuted for allegedly flouting procurement laws in the Standard Gauge Railway (SGR) tender.

The Public Investment Committee (PIC) probing the controversial, multi-billion shilling tender awarded to a consultancy firm for the SGR's design, review and construction supervision, faulted the process and called for its revocation.

The committee chaired by Adan Keynan (Eldas), wants the Ethics and Anti-Corruption Commission (EACC) to investigate KRC Managing Director Atanas Maina and members of the tender committee Maxwell Mangich (Chair), Alfred Matheka (Vice Chair), Lucy Njoroge (Secretary), Benedict Kamau, Jeremiah Matu, Stanley Gitari, John Muchera and Maurice Baraza for irregularly awarding the tender.

LACK EXPERIENCE

In a damning 100-page report, the committee said the corporation awarded the tender to a consortium referred to as TSDI/APEC/EDON in total disregard for the law.

The committee faulted the consortium for deliberately quoting a low figure of Sh3.6 billion in anticipation of benefiting from the amount.

"The consortium's main aim was to tactically dump the price of consultancies with the sole aim of acquiring absolute control of the construction and supervision of the SGR project," the committee report reads.

It further notes the tender award contravenes the legal requirement under Article 201 of the Constitution and international instruments on the prudent and responsible use of the money.

"The officials should be held individually responsible for contravening the Public Procurement and Disposal Act, Chapter Six of the Constitution and guidelines issued by the World Bank and International Monetary Fund among other international laws. The laws require that due diligence is adhered to where there is conflict of interest, which is unethical and improper business practice," reads the report.

It adds, "The contract awarded lacks the necessary competence, expertise and experience to undertake the role envisaged in the contract dated June 3, 2014. Members admitted that they intended to use Phase 1 of the SGR project."

The report also noted that the consortium lacks a major electrical and mechanical component to perform the requisite role of a consulting engineer.

"The consortium as currently constituted has no experience and competence to supervise electro-mechanical works, which form the bulk of the civil work, supply and installation of facilities, locomotives and rolling stocks," the PIC stated.

The report adds, "The project is supposed to guard against huge cost of overruns, costly delays, failed procurement, poor project design, and use of low quality material among others, in the internationally accepted principals that will assure Kenyans value for their investment."

The report tabled in the House on Tuesday also involves investigation into the procurement and installation of facilities, locomotives and rolling stock.

The committee took issue with the hiring of the consultant, which it said was in violation of the adoption of its earlier report on April 30, which recommended an independent consultant be hired.

APEC Consortium Limited and Edon Consultancy International Ltd are Kenyan companies while TSDI is a Chinese company.

"SGR is a regional project involving Kenya, Uganda, Rwanda and South Sudan and is likely to extend to neighbouring nations. Substandard work in Phase I, will jeopardise the whole project and undermine Kenya's position in the region and internationally," the report warned.

CONFLICT OF INTEREST

It continued, "The exceptionally low bid is suspicious and indicative of collusion and insider information. The specified figure was Sh9.4billion (tax not included)."

The committee said TSDI has a national and business affiliation with the contractor (CRBC) and thus suffers from serious issues of conflict of interest and Kenyans would not be guaranteed value for their money if the consultancy and contract proceeds unchecked.

The team said although TSDI is the only firm in the consortium with experience in major railway projects, it is tasked with the mandate of performing only 30 – 40 per cent of the consultancy contract.

They said KRC should ensure inter-connectivity between the Changwe-Kilindini Harbour, Jomo Kenyatta International Airport (JKIA) and the Nairobi Central Business District.