MPs want SGR deal reviewed
Lawmakers have recommended the reversal of the multi-billion shilling Standard Gauge Railway (SGR) contracts that “inaccurately” listed Kenya Ports Authority (KPA) as the borrower.
Public Investment Committee (PIC) in its 24th report observed that the Authority was bullied into signing the contract that openly exposes its assets in a situation where it defaults.
The authority, according to the committee chairman Abdulswamad Nassir is listed as a borrower while its sole responsibility was to facilitate and guarantee minimum freight volumes.
The Committee now recommends that the Ethics and Anti-Corruption Commission (EACC) investigates the contract and holds those responsible for drafting it accountable.
Payment arrangement
“The EACC should investigate the signing of the Payment Arrangement Agreement without approvals from the KPA Board, Mother Ministry and the Cabinet,” the report states.
Reads the report: “Further, the National Treasury should renegotiate the entire Payment Arrangement Agreement with a view to discharging the KPA from the contract and replacing it with the KRC.”
Nassir warned during a press conference at parliament buildings that if the contract is not reversed, the Port of Mombasa and other properties owned by the authority could be taken over by the lender which is the Exim Bank of China. The loan stands at Sh364 billion with the KPA and the Kenya Railways Corporation named as the borrowers.
“The contract as it is clear that in a situation whereby KPA and KRC default in servicing the loan the lender will be at liberty to seize properties belonging to the two entities,” said Nassir.
The contract further states that the two-state corporations gave up claim to any immunity from legal charges should they fail to honour the loans as agreed.
The committee established that KPA had no copies of the preferential credit loan agreement dated 11th May 2014 and the buyer credit loan agreement. This was because the Authority was not a party to these agreements. However, a request has been made through the parent ministry for copies of the same.
