Atanas Kariuki Maina Managing Director Kenya Railways during a media briefing. (Photo: Wilberforce Okwiri/Standard)
More than 75,000 passengers have travelled on the Standard Gauge Railway line since it was commissioned, Kenya Railways Managing Director Atanas Maina has said.
Demand for the passenger service exceeded projections, said the MD, informing the decision to introduce additional trips between Mombasa and Nairobi that should have started Saturday. “We had anticipated that critical technical and operational handover processes would have been completed by now,” Mr Atanas said, adding “However, there has been a delay because CRBC’s key staff are arriving now and require time to go through the handover processes.”
CRBC is the Chinese firm that built and now operates the railway project, which is a hot political subject with the Opposition claiming major kickbacks were paid to government officials. Owing to the soaring demand from passengers, the firm has had to increase capacity on trains from the initial 1,200 to the maximum of 1,500 by adding additional coaches.
“We expect to conclude the handover processes in the coming weeks,” Maina said of the delays in starting the Inter-County train service which would serve the various stations along the track. Freight services would start much later in the year, he added.
Current passenger services are express serving only the Mombasa and Nairobi terminals. Maina sought to respond to claims by Opposition leader and Nasa Presidential candidate Raila Odinga who said Sh130 billion was paid as bribes by CRBC to influence the award of the Sh327 billion tender.
He told a campaign rally in Narok on Thursday that the project cost was overly inflated to accommodate the kickbacks, and that the project cost estimated during the Kibaki administration were much lower. Maina said the price was the best Kenya could get, and that the contractor had “delivered the project ahead of time”.
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“The contract was for 60 months and has been delivered in 36 months,” he told Weekend Business. President Uhuru Kenyatta and his deputy William Ruto have equally defended the project cost in the continuing hot exchange with the Opposition. Prior stories published by our sister publication The Standard detailed the intrigues about the mega project including how the cost evolved since conception in 2009.
The story starts on August 12, 2009, when a Memorandum of Understanding was entered into between Kenya and China Road and Bridge Corporation (CRBC) where the company would undertake a feasibility study for phase one of the railway, between Mombasa and Nairobi. The Chinese firm also agreed to do design works free of charge.
Raila was the Prime Minister in the coalition government with Mwai Kibaki as President, which informs his proposition that the SGR was a project of their regime. A ministerial statement signed by regional leaders indicates that President Kibaki met Uganda’s Yoweri Museveni on October 28, 2008, regarding the SGR.
The statement, dated February 2014, was signed by then Transport Permanent Secretary Nduva Muli. It was agreed that the two countries would build the SGR, linking the Mombasa port to Kampala with a branch line to Kisumu and Pakwach. This commitment was important because initial projections showed SGR would be a white elephant if Kenya did it alone.
CRBC would initially develop the project as a Build Operate Transfer arrangement. As the contractor, CRBC was to seek funds to build and operate it until it gets its money back before handing over to the Government. There was a strong case for building a modern railway as the old line, linking Kenya to Uganda, was developed more than 100 years ago.
After seeing challenges the Government would face before making the railway line profitable, China decided to offer a loan, build it and let Kenya handle the rest. This is what turned the project from what it was initially into a loan,” a former top Government official who did not wish to be named told the Standard in the previous interview.
“A lot of action happened in 2012. There was uncertainty. So it was important that the contract was awarded before the next government was formed. A lot of money was going around to ensure that this happened. This was also the best time for politicians to strike deals,” said the source.
The letter of award for the civil works was written on July 10, 2012. Mr Muli, then the Kenya Railways Corporation (KRC) boss, said KRC would be “Government’s representative” for the project. The Chinese firm wrote back on the same day, accepting the award: “This refers to your letter of award… awarding the above captioned project to our company. We hereby give a formal unconditional acceptance of the award,” wrote Qiang, an official of the contractor.
The tender amount was Sh220.9 billion. This amount did not include supply of wagons. “We take this opportunity to convey our appreciation for the award of the contract, and look forward to signing the commercial contract at the earliest time possible,” the acceptance letter read.
The project was later expanded to include the delivery of locomotives and coaches, raising the total cost to the controversial sum of Sh327 billion.